THE 

Inheritance  Tax  Law 

OF  THE 

STATE  OF  ILLINOIS, 

BEING  THE 

Act  to  Tax  Gifts,  Legacies  and  Inheritances  in  certain  cases,  etc.,  in 
FORCE  July  1st,  A.  D.  1895,  as  Amended  in  1901,  and  as  Revised  and 
Extended  under  the  title  of  An  Act  to  Tax  Gifts,  Lega- 
cies, Inheritances,  Transfers,  Appointments  and  In- 
terests IN  Certain  Cases,  etc.,  in  force 
July  1st,  A.  D.  1909, 

WITH  A  ':•"'".:        \  ': ' ' 

DIGEST 

OF 

All  the  Decisions  of  the  Supreme  Court  of  Illinois; 
References  to  Opinions  of  the  County  Court  of  Cook  County; 
Decisions  of  the  United  States  Supreme  Court; 
Decisions  of  the  Courts  of  New  York,  Massachusetts,  Iowa, 
New  Jersey,  California  and  other  States; 

together  with  the 

PRACTICE  AND  PROCEDURE 

In  the  County  Court  of  Cook  County  (including  the  County  Judge, 
as  such,  and  before  Appraisers). 

RULES  OF  PROCEDURE 

established  by  state  officers. 

OPINIONS  OF  THE  ATTORNEY  GENERAL  OF  ILLINOIS. 


COMPLETE  TABLE  OF  CASES  AND  FORMS 

AND 

DECISION    OF  THE    COURT  OF   CLAIMS. 


BY 

WALTER  K.  LINCOLN, 

OF  the  CHICAGO  BAR. 
INHERITANCE  TAX  ATTORNEY  FOR  COOK  COUNTY. 


COPYRIGHT  1912 

by 
WALTER  K.  LINCOLN 


Press  of   Barnard  &   Miui-er 
uaw  printers        .".         chicago 


TABLE  OF  CONTENTS, 


CHAPTER  I. 

HiSTORiCAi. — Origin    of    Illinois   Laws — Gteneral    Sub- 
ject— Succession. 

Par.  Page. 

1.  Historical 1 

2.  The  United  States 3 

3.  The  Inheritance  Tax  Law  of  Illinois— Its  Origin  and  Constitu- 

tionality.   Nature  of  the  Law  in  General 4 

4.  Constitutionality — New  York  Law  of  1885 4 

5.  Act  of  1885  construed  to  exclude  non-residents^  property 5 

6.  Amendment  of  1887  designed  to  cover  non-residents*  property.  5 

7.  Tax  extended  to  lineals 5 

8.  Illinois  Law  of  1895  taken  from  New  York 6 

9.  Constitutionality  of  Illinois  law  of  1895 6 

10.  Illinois  Law  of  1895  held  constitutional  by  the  United  States 

Supreme  Court 9 

11.  Amendment  1901 — Illinois 13 

12.  Illinois  Law  in  force  July  1st,  1909 14 

13.  Scope  of  the  Law 14 

14.  State 's  Interest   14 

15.  Eight  to  take  property  is  regulated  by  the  State 14 

16.  Construction — in  favor  of  the  tax  payer 15 

17.  "When  against  the  citizen 15 

18.  Tax — Controlled  by  Statute  in  force  at  death  of  decedent 15 

19.  Intestate  Laws — Meaning  of 15 

20.  Succession — is  governed  by  the  law  of  domicile 16 

21.  Succession — governed  by  law  of  domicile 16 

22.  Succession — governed  by  law  of  domicile 17 

23.  Succession — cannot  be  changed  by  compromise  among  benefi- 

ciaries.   Money  paid  in  compromise  not  a  deduction 17 

24.  Compromise  of  will  contest — does  not  affect  law  of  succession . .  17 

25.  Curtesy — does  not  pass  by  will  or  intestate  laws 18 

26.  General  Revenue  Law — decisions  under  not  necessarily  in  point 

in  inheritance  tax  cases 19 

27.  Transfer  Tax  Act  of  1892  (N.  Y.)  not  retroactive 19 

28.  Remainders  created  prior  to  tax  law  are  not  taxable  by  sub- 

sequent enactment  20 

29.  When  State  Supreme  Court  Final  on  Matters  of  Taxation 22 


257550 


11 


CHAPTER  IT. 

Property    Within    the    State — Traii^sfers    Taxable — 
Statutory  Exemptions — Eates  of  Tax. 

Par.  Page. 

30.  Section  One,  Illinois  Law  of  1895 27 

31.  Section  One,  Illinois  law  in  force  July  1st,  1909 28 

32.  Transfer — Meaning  of  31 

33.  Transfer — Eights  and  rates  determined  as  of  death 31 

34.  Transfer — Time  of   32 

35.  Transfer — Acceptance  of  Transfer  is  necessary. 32 

36.  Transfer — When  a  widow  accepts  a  devise  in  lieu  of  dower.  ...  32 

37.  Transfer — ^Payment  of  a  debt  for  services  by  legacy 33 

38.  Trustee's  fees  coupled  with  annuity  is  taxable  bequest 33 

39.  Transfer— must  be  something  of  value.     Worthless  account...  34 

40.  When  the  Imposition  of  a  tax  must  be  postponed  (Laws  1895)  34 

41.  Eemainder — When  contingent  cannot  be  presently  taxed 35 

42.  Eemainder — Is  Vested  When  (Laws  1895) 35 

43.  Eemainders — Tax  Payable  at  Testator's  death 35 

44.  Eemainders — Defeasible  estates  not  taxable  until  indefeasible  35 

45.  Eemainders — Created  prior  to  Tax  Legislation  are  not  taxable.  36 

46.  Dower — Is  not  Taxable  and  must  be  subtracted  from  property 

chargeable  therewith    37 

47.  Dower — is  Taxable  in  Illinois  under  Act  of  1895 38 

48.  Award 38 

49.  Ante-nuptial  contract — when  taxable 39 

50.  Ante-nuptial   Contract — not   taxable 40 

51.  Ante-nuptial  contract  to  make  a  will — transfer  is  by  will  and 

taxable 40 

52.  Advancements — Taxable  under  Federal  Inheritance  Tax  Law.  41 

53.  Community  Property — California  Statute  taxing  same  does  not 

impair  Obligation  of  Contract 42 

54.  Gifts  Inter  Vivos — When  Not  Perfected 42 

55.  Paragraph  One,   Section  One,   Illinois  Law 42 

56.  Equitable  Conversion — General. ' 43 

57.  Equitable  Conversion  Not  Applicable  to  Subject  Property  to 

Taxation 43 

58.  Personal   Property — Testamentary   Direction   to   Convert   Eeal 

into   Personal  Property 44 

59.  Property  Physically  Situate  at  Domicile  of  Owner 44 

60.  Leasehold  Interest    45 

61.  Domicile  Within  the  State — Chattels  Without  the  State 45 

62.  Property  in  Foreign  State — Taxable  at  Domicile  of  Decedent.  45 


Ill 

Par.  Page. 

63.  Personal  Property— Share  in  a  Joint  Stock  Association  Owning 

Keal  Estate    45 

64.  Life  Insurance — Payable  to  Executors  or  Assigns 46 

65.  United  States  Bonds — ^When  Not  Taxable 46 

66.  United  States  Bonds — When  Taxable 47 

67.  United  States  Bonds — When  Taxable 47 

68.  Paragraph  Two,  Section  One,  Illinois  Law 48 

69.  Non-residents'  Property  situate    in    New  York   Not  Taxable 

Under  Act  of  1885 48 

70.  Property  Within  the  State — When  Taxable 48 

71.  Property  Within  the  State — Ancillary  Administration  Cannot 

be  Invoked  to  Increase  Tax.    Mortgage  Deducted 49 

72.  Eeal  Estate — ^United  States  and  Other  Bonds — Cash  and  Notes 

Within  the  State 50 

73.  Stocks  and  Bonds  of  Domestic  Corporations  Taxable  in  Illinois 

— Stocks  and  Bonds  of  Foreign  Corporations  Not  Taxable 
(L.  1895)    51 

74.  Stock     of     Domestic    Corporations — Owned    by     Non-resident 

Decedent 53 

75.  Stock    and    Bonds    of    a    Domestic    Corporation — Non-resident 

Owner — Held  as  Collateral 53 

76.  Stock — Certificates    and    Owner's    Residence    Without    Taxing 

State 54 

77.  Stock — Decedent  a  Non-resident  and  Certificates  Without  the 

Taxing  State   54 

78.  Stock — Certificates  and  Owner's  Residence  Without  the  Taxing 

State — Taxable   55 

79.  Situs  of  Stock  for  Taxation 55 

80.  Stock  of  New  Jersey  Corporation — Not  Taxable  When  Owner 

Dies  Non-resident 55 

81.  Stock — Certificates   and   Owner's    Residence    Without  Taxing 

State    57 

82.  Stock— Decedent  a  Non-resident — Certificates  Without  the  Tax- 

ing State — Sole  Administration  in  Foreign  Jurisdiction  and 
Closed  Before  Tax  Paid  in  New  York 57 

83.  Stock — Issued  by  Corporation  With  Property  in  Two  States — 

Shares  Taxable  at  Full  Value.     National  Bank  Stock 58 

84.  Stock    of    Corporation    Organized   in    One    State — Property    of 

Corporation  in  Several  States 59 

85.  Stock  of  a  Corporation  Organized  in  Two  or  More  States — Tax- 

able on  Proportion  of  Property 59 

86.  Mileage  is  a  Fair  Basis  to  Determine  Proportion — But  Is  Not 

the  Only  Basis 63 

87.  Stock  of  Corporation  with  Property  in  two  or  more  States — 

Proportion  Taxable    63 

88.  Stock — Non-resident — Proportionate  Value  Taxable 64 

89.  Stock — Non-resident    Ownership    Requires    Ancillary    Adminis- 

tration in  Taxing  State 64 


IV 
Par.  Page. 

90.  Stock   of  National  Banks — Taxable 64 

91.  Stock  of  Foreign  Corporations — Not  Taxable 65 

92.  Stock  of  Foreign  Corporation — Not  Taxable 66 

93.  Bonds   of  Foreign   Corporation   and  Stock  of   National  Bank 

Within  the  State 66 

94.  Bonds  of  Foreign  and   Domestic   Corporations — Stock  of  Do- 

mestic  Corporation    67 

95.  United  States  Bonds — Stock  of  Foreign  Corporations 68 

96.  Bonds — ^Foreign — When  Taxable    68 

97.  United  States  Bonds — When  Not  Taxable 68 

98.  Bonds  and  Stock   of   Domestic   Corporations   Owned  by  Non- 

resident and  Situate  Without  the  State 69 

99.  Bonds  Held  out  of  New  York  secured  by  mortgage  on  land  in 

New   York— Not   Taxable 71 

100.  Notes  Secured  by  Mortgage 72 

101.  Notes — When  Situate  at  Domicile  of  Non-resident  of  Massachu- 

setts, but  secured  by  Eeal  Estate  Therein 72 

102.  Property   Taxable  in  Two   States — Money  Deposited   in   New 

York — Depositor  Eesident  of  Illinois 74 

103.  Money — Deposited  in  New  York  State  for  Nearly  Two  Months 

—Taxable 75 

104.  Money  of  Non-resident  Decedent  on  Deposit  in  New  York — 

Trust  Account 75 

105.  Notes  Secured  by  Mortgage  Taxable  in  Michigan 76 

106.  Notes  Secured  by  Mortgage  on  Lands  in  Michigan  Subject  to 

Taxation   77 

107.  Land  Contracts   78 

108.  Non-resident — Capital  Invested    in    Business  in  New  York — 

Stock  Exchange  Membership  Taxable 78 

109.  Partnership  Property 79 

110.  Partnership — Assets  in  New  York  and  Illinois 79 

111.  Non-resident    Decedent    Possessed    of    Legacy    in    New    York 

Estate    79 

112.  Share  of  Eesident  Decedent  in  Undistributed  Foreign  Assets..     80 

113.  Deceased  Non-resident ^s  Interest  in  Eesident  Decedent's  Estate     80 

114.  Non-resident   Decedent   a  Beneficiary   in  Unliquidated   Assets 

Within  the  State 81 

115.  Credits  of  Non-resident  in  Taxing  State — When  Taxable 81 

116.  Tax  Paid  to  United  States  Under  Federal  Inheritance  Tax  Law 

and  Tax  Paid  to   the   State   of  Montana  Does   not   Affect 
Taxation  in  the  State  of  New  York 82 

117.  Non-resident — When  Property  in  Taxing  State  is  Equalled  by 

Indebtedness    83 

118.  Insurance — Domestic  Policy  on  Life  of  Non-resident  not  taxable     83 

119.  Insurance — Domestic    Policies    on    Life    of    Non-resident    Not 

Taxable ; 84 


V 

Par.  Page. 

120.  Contract  for  Sale  of  Land  in  Nebraska — Owner  a  Eesident  of 

New  York 84 

121.  Non-resident  Estate — Distribution  by  Executors  Cannot  avoid 

Taxation 84 

122.  Non-resident    Estate — Distribution    by    Administrator    Cannot 

Avoid  Taxation — Proportion  of  Indebtedness  Deductible ....     84 

123.  Distribution  of  Property  of  Non-resident  Cannot  Reduce  Tax. 

Pro  Rata  Distribution 85 

124.  Non-residents — Property  in  Taxing  State  Pro  Rated  for  Taxa- 

tion.    Executors  Cannot  Distribute  so  as  to  Reduce  Tax.  ...     85 

125.  Paragraph  Three,  Section  One,  Illinois  Law 86 

126.  Transfer  in  Contemplation  of  Death 86 

127.  Transfer  in  Contemplation  of  Death 89 

128.  Transfer  in  Contemplation  of  Death — ^Act  Imposing  Tax  Con- 

stitutional       90 

129.  Transfer — When  Not  in  Contemplation  of  Death 91 

130.  Transfer  to  Take  Effect  after  Death — a  Writing  Not  Necessary 

to  Evidence  Retention  of  Income 92 

131.  Transfer  to  Take  Effect  after  Death — When  Taxable 93 

132.  Transfer  Prior  to  Death — When  Not  Taxable 94 

133.  Transfers  Prior  to  Death — When  Taxable 96 

134.  Transfers — To  Take  Effect  at  or  after  Death 96 

135.  Transfer — To  Take  Effect  at  or  after  Death 98 

136.  Transfer  to  take  effect  at  Death 98 

137.  Transfer — Intended  to  Take  Effect  at  Death  of  Donor 99 

138.  Transfer    Prior   to    Death — Reservation     of     Income    by    oral 

arrangement     100 

139.  Transfer  Prior  to  Death — ^When  Taxable 100 

140.  Cases  in  Which  Transfers  were  Held  Not  Taxable 100 

141.  Transfer — Intention  to  Defeat  the  Tax 101 

142.  Transfer — Taxation  is  Imposed  at  Time  of  Death  of  the  Grantor  101 

143.  Transfer  by  Deed  Prior  to  Inheritance  Tax  Law — When  Tax- 

able     101 

144.  Other  cases  wherein  the  question  of  tax  is  raised  on  transfers 

prior  to  death 101 

145.  Paragraph  Four,  Section  One,  Illinois  Law 102 

146.  Power   of   Appointment — When    Created   by   will   of   decedent 

who    died   prior   to    tax   legislation — real    estate    converted 
into  Personalty  before  Transfer 103 

147.  Power  of  Appointment — Transfer  is  Effected  by  Exercise  of 

Power   106 

148.  Power  of  Appointment  Created  by  will  of  Testator  who  died 

prior  to  tax  Legislation 109 

149.  Tax  on  Transfer  Effected  by  Power  Created  under  will  before 

tax  Legislation  Constitutional 110 

150.  Power  of  Appointment— When  Situs  of  Property  Immaterial.   110 


VI 

Par. 

151.  Tax   on  Transfer  Effected  by   Exercise   of   a   Power   created 

Prior  to  Tax  Legislation  Constitutional 112 

152.  Power    of    Appointment — When    Erroneous    Prior    Assessment 

Does  Not  Preclude  Tax  on  Transfer  by  the  Exercise  of  the 
Power    113 

153.  Power  of  Appointment — Eeal  Estate  in  New  York  Appointed 

by  Non-resident  Donee  Taxable 114 

154.  Donee  and  Appointee  Non-resident — Property  within  the  State  115 

155.  Mortgages    held    Outside    State    Transferred    by    Non-resident 

under    Testamentary    Power    Created    by    will    of    deceased 
resident  of  New  York 116 

156.  Power  of  Appointment — When  Not  Exercised 117 

157.  When  Appointee  Takes  under  will  creating  Power  and  not  by 

exercise    of  power 117 

158.  When  Exercise  of  Power  is  Mere  Form  Beneficiary  Takes  by 

Will   Creating  Power 118 

159.  When  Appointee  Elects  to  Take  by  Will  instead  of  Power...   119 

160.  Value  of  Property  Not  Diminished  by  Life  Estate  Previously 

Taxed   120 

161.  Eelationship  of  Donee  of  Power  to  Appointee  Determines  Eate 

of  Tax    120 

162.  Eate  of  Taxation  Governed  by  Law  in  Force  at  the  Time  of 

the  Exercise  of  the  Power 120 

163.  Exemptions — Eelationship — Eates  of  Tax — When  Tax  Accrues 

— All  Questions  Determined  as  of  Date  of  Transfer 121 

164.  Tax  Accrues  at  Death  of  Decedent 121 

165.  Beneficial    Interest — Transfer    Must   Be    Effective    While    Tax 

Law  is  in   Force 121 

166.  Eate  of  Tax  Determined  by  Eelationship 122 

167.  Exemption 122 

168.  Exemption — Statutory    Exemption    Eelates     to     the    Share    of 

Beneficiary 122 

169.  Exemptions — Claimant  Must  Show  Exemption 122 

170.  Exemptions — not    favored    123 

171.  Lineal  Descendants — Children  of  Adopted  Child 123 

172.  Particular  Eates  of  Taxation  and  Exemptions  under  the  Illinois 

Law  in  Force  July  1st,  1895 123 

173.  Transfers  Under  the  Illinois  Law  Effected  Prior  to  July  Jst, 

1909 — Eates  and  Eights  of  the  Parties 124 

174.  Illinois  Law  in  force  July  1st,  1909 — Eates  and  Exemptions.  . .  124 

175.  Husband  of  a  Daughter  who  died  before  Testator 125 

176.  When  Husband  of  Deceased  Daughter  is  remarried 126 

177.  Widow  of  Adopted  son  is  ''Widow  of  a  Son" 126 

178.  Adoption — When  Effected  in  Foreign  State  Entitles  Beneficiary 

to   Exemption    126 

179.  Children   of  an  Adopted  Child  are  "  Lineal '^  Descendants  of 

Decedent    126 


vu 

Par.  Page. 

180.  Child  of  Adopted  Child— When  Taxable 127 

181.  Relation  of  Parent  to  Beneficiary— Must  be  Clearly  Shown..  127 

182.  Acknowledged  Eolation  of  Parent 127 

183.  Parent  and  Child — Mutually  Acknowledged  Relation 128 

184.  Children   of   Person   to   whom   Decedent   stood   in   Relation   of 

Parent — Stranger  in  Blood 129 

185.  Children  of  Person  to  whom  Decedent   Stood  in  Relation   of 

Parent   are    Taxable 129 

186.  Act  of  1909  (Illinois)  Limits  Exemption 130 

187.  Both  Parents  must  be  dead — Stepchild  a  stranger 130 

188.  Grandmother  not  a  ** Lineal  Descendant'^ — Taxable  as  Stranger  131 

189.  Second  Class  Beneficiaries — Uncle,  Aunt,  Niece  or  Nephew,  or 

any  Lineal  Descendant  of  the  same 132 

190.  Contra 132 

191.  Third  Class — Strangers  in  Blood,  etc 133 

192.  Exemptions — $500  a  Limitation,  not  an  Exemption 134 

193.  Exemptions — $500  a  limitation 134 


CHAPTER  ni. 
Date  of  Valuing  Property,   Life   Estates,  Annuities 

AND  EeMAINDERS. 

194.  Section  Two    135 

195.  When  Life  Estate  is  Exempt — Exemptions  to  Certain  Lineals 

Abolished 136 

196.  Discrimination  Between  Remainders  to  Lineal  and  Collateral 

Heirs 137 

197.  Constitutional — Discrimination  Between  Beneficiaries.  Property 

Transferred  without  the  State  at  Death  of  Donor 137 

198.  Five  Per  Cent.   Rate   for  Valuing  Annuities  and  Estates   for 

Life  or  Years 138 

199.  Value  of  Property  Transferred — ^Fixed  as  of  what  time 138 

200.  Remainders  and  Life  Estates — How  Determined 138 

201.  When  Life  Estate  Deducted  and  not  Taxable 138 

202.  Value  of  Remainder — How  Determined 139 

203.  Remainder — Value  of — How  Determined 139 

204.  Life  Estate — How  determined  after  Decease  of  Life  Tenant.  . .  139 

205.  Life  Estate — ^Valuation  when  Tenant  Predeceases  Appraisement  139 

206.  Bond  may  be  Given  by  Beneficiary  not  in  actual  Enjoyment  or 

Possession 140 


vm 


CHAPTER  rV^ 

When  Tax  is  Due — Interest. 

Par.  Page. 

207.  Section  Three  141 

208.  Tax — is  Due  and  Payable  at  Death 141 

209.  Tax  Paid  by  Whom? 142 

210.  Interest  is  chargeable  from  death — Tax  must  be  Paid  within 

six  months  to  obtain  discount  and  avoid  interest 142 

211.  County  Court  cannot  go  Outside  of  Statute  to  Grant  Relief...   143 

212.  Courts — Cannot  Pass  on  the  Wisdom  of  Legislative  Policy 143 

213.  Interest — Rate    Determined    by    Law    in    Force    at   Death    of 

Testator 144 

214.  Interest — on  Estates  Postponed  for  Taxation 144 

215.  Deposit  to  save  Discount  and  Interest 144 

CHAPTER  V. 

Legal  Representative  to   Coixect  Tax  From  Benepi 
ciARY  OR  Heir. 

216.  Section  Four 146 

217.  Administrator — must  Withhold  Tax  from  Share  of  Beneficiary  147 

218.  Executor — Duty  to  Move  for  Appraisement 147 

219.  Executors  and  Administrators — Subrogation 147 

220.  Executors — Liability   147 

221.  Power  to  Apportion  Property  to  pay  Legacies 147 

CHAPTER  VI. 

Legal  Representative — Dx-^ty — Liability. 

222.  Section  Five   148 

223.  Executor — Personally  Liable   148 

224.  Executor — Liability 149 

225.  Collection  of  Tax — Executors,  etc.,  Must  Pay  Tax 149 

226.  Executors,  Administrators  and  Trustees  Personally  Liable 149 

227.  Executors  and  Administrators  Liable  to  Pay  Tax 149 

228.  Executors  Liable  to  Pay  Tax 149 

229.  Executor's  Liability 150 

230.  Executors — Non-resident   Executor  not   Discharged   from   Lia- 

bility     150 

231.  Executors — Personally  Liable   150 


I 


IX 
Par.  Page. 

232.  Executor — When  Not  Liable   150 

233.  Executor   and   Administrator — Liability  not  Relieved   by   Dis- 
charge without  Payment  in  Probate  Proceeding 151 

234.  Subrogation— Covenant    of    Warranty    in    Deed    Transferring 
Land  Subject  to  Tax 151 


CHAPTER  VII. 
Tax  Payable  to  County  Treasitbeh — Receipt. 

235.  Section  Six   153 

236.  Probate  Court  Cannot  Discharge  Liability  of  Legal  Represent- 

ative— Must  Appeal  to  Review  Appraisement 153 

237.  Discharge  of  Probate  Court   does  not  Discharge   Executor   or 

Administrator  from  Liability 154 

238.  Probate  Court  May  Demand  Voucher  Showing  Payment 154 

CHAPTER  VIII. 

Legal  Representative  to  Make  Known  Property  Sub- 
ject TO  Tax. 

239  Section  Seven  (Law  1909) 155 

CHAPTER  IX. 
Refund  of  Tax. 

240.  Section  Eight  (Law  1909) 156 

CHAPTER  X. 

Transfer  of  Property  by  Corporation,  Bank,  Deposit 
Company,  Institution  or  Person. 

241.  Section  Nine  157 

242.  Is  Constitutional   159 

243.  Litigation  Involving  Section  Nine  159 

244.  Possession  and  Control  of  Safe  Deposit  Company 160 

245.  Possession  and  Control  of  Safe  Deposit  Company — Must  De- 

liver the  Contents  to  Owner — State  is  Part  Owner 160 

246.  State 's  Interest  in  Property  Contained  in  a  Safety  Deposit  Box  161 

247.  Notice — State  Must  be  Advised  of  the  Contents  of  the  Box. 

State  a  Part  Owner 161 


X 

Par.  Page. 

248.  Depositary  and  Safe  Deposit  Company  not  Deprived  of  Consti- 

tutional Eight  by  Eequirement  of  Notice 162 

249.  Depositary  has  Kemedy 162 

250.  State  has  Interest  Equal  to  Beneficiary 163 

251.  Interested  Parties  are  Entitled  to  Knowledge  of  Contents  of 

Box 163 

252.  Joint  Lessees — Co-Partnership  Property — Constitutional 163 

253.  State's  Eight  is  Fixed  at  the  Time  of  the  Death  of  Lessee.  . . .  164 

254.  Does  not  Impair  Obligation  of  Charter  of  Safe  Deposit  Com- 

pany   164 

255.  No  Delivery  until  Tax  is  Paid 165 

256.  Safe  Deposit  Company  not  Deprived  of  Property  and  Liberty 

Without  due  Process  of  Law 165 

257.  Depositary  Company  as  Tax  Gatherer 165 

258.  Unreasonable  Searches  and  Seizures 167 

259.  Property  of  Safe  Deposit  Company  not  Subject  to  Public  Use 

without   Just    Compensation 167 

260.  Corporations  Liable  for  Transfer  of  Stock 168 

261.  Notice — Bank,  Custodian   of  Money  or  Securities — Must  give 

the  Notice 168 

262.  Will  and  Codicils  not  Property  within  Section  Nine 168 

263.  Transfer — what  Constitutes  within  Meaning  of  Section  Nine..  169 

CHAPTER  XT. 
Eefund  of  Tax. 

264.  Section  Ten 170 

265.  County  Treasurer — Cannot  Eefund 170 

266.  State  Treasurer — Cannot  Eefund  without  Appropriation 171 

267.  Eefund  by  State — Payment  must  have  been  under  Duress  of 

Compulsion 171 

268.  Eefunds — When  Court  of  Claims  Awarded  Claim  for  Eefund  or 

Erroneous  Payment   171 

269.  State  Auditor   172 

270.  Interest — Cannot  be  Eecovered  on  Eefund 172 

271.  Interest — Cannot  be  Eecovered  against  the  State  of  Iowa  on 

Eefunds 172 

272.  State 's  Duty— Eefunds    173 


XI 

CHAPTER  XII. 

Appeaiser  aintd  Appraisement. 

Par. 

273.  Section  Eleven 176 

274.  Tax  Proceeding  is  One  at  Law 177 

275.  County  Judge  Appoints  Appraiser — Appeal  lies  to  County  Court 

— The  State  is  an  Interested  Party  and  is  Eepresented  by 
the  Attorney  General — Appeal  Lies  to  the  Supreme  Court,.   178 

276.  County   Judge    must    Appoint    Appraiser — Mandamus    may   be 

Invoked 180 

277.  County  Judge — Has  Original  Jurisdiction  to  fix  the  Tax 184 

278.  County  Judge  is  Assessing  and  Taxing  Officer 184 

279.  County  Judge — Is  Made  a  Taxing  Officer — Fixes  tax  ''As  Of 

Course.  ^ '    Is  a  Special  System  of  Taxation 184 

280.  County  Judge — Order  of  Tax  must  be  Entered  "Forthwith." 

Objection  to  order  cannot  then  be  made 185 

281.  County  Court — Has  Power  to  Determine  all  Questions  Eelating 

to  Taxation   185 

282.  County    Court — Construction    of    Will    Conclusive    only    as    to 

Taxation 186 

283.  When  State  not  Bound  by  Construction  of  Will 186 

284.  County  Judge  has  Original  Jurisdiction  to  Determine  Tax....  186 

285.  Appraiser 187 

286.  Commission  to  Take  Evidence 187 

287.  May  Compel  Witness  to  Testify 187 

288.  Not  Concluded  from  Taxing  Property  Escaping  Taxation  Be- 

cause of  Executor's  Claim  it  was  not  Part  of  Estate 187 

289.  Order  of  Tax — is  Final  as  to  Property  Involved 188 

290.  Order  of  Tax  is  Final  when  not  Appealed  from 188 

291.  Order  of  Tax  Cannot  be  Modified  except  by  Appeal — Excessive 

Valuation  not  Eeviewable  on  Petition 189 

292.  Order  of  Tax  is  Final 190 

293.  Order  of  Tax  is  Final  and  Ee-appraisement  cannot  be  made..  190 

294.  Order  of  Tax  is  Final  and  can  Only  be  Eeviewed  by  Appeal. .  191 

295.  Cannot  Amend  Order  Assessing  Tax 192 

296.  Can  Amend  or  Correct  Order  without  Appeal 193 

297.  Cannot  Eeverse  Order  of  Tax  on  Motion 193 

298.  Order  of  Tax  is  a  Decree  or  Order  of  Court 193 

299.  Subrogate  Acts  Judicially  in  Entering  Order  of  Tax 194 

300.  Notice  of  Tax — Presumption  of  Service  by  County  Judge 194 

301.  County  Judge — Must  Enter  Order  According  to  Direction  of 

Court  of  Eeview — Appeal  Cannot  be  Taken  in  Piece-meal, , .   195 

302.  Appraisement  and  Appraiser 195 


xu 
Par.  Page. 

303.  Appraiser  Fees 196 

304.  Expenses  and  Disbursements 196 

305.  Legal  Counsel  for  Appraiser 196 

306.  Service  is  Had  by  Notice 196 

307.  Appraisement  must  Proceed  under  Section  Eleven  of  the  Illinois 

Lav^ 197 

308.  Inventory — State  has  Eight  to  Compel  Filing 197 

309.  Appraisement 198 

310.  Practice  and  Procedure — ^Which  Law  Governs 199 

311.  Contingent  Estates— All  Property  Appraisable — Tax  Postponed  199 

312.  Eesidence — Appraiser  May  Determine 199 

313.  Appraiser — Surrogate  May  Appoint  before  Claims  are  Ascer- 

tained       200 

314.  Appraiser  Cannot  Decide  Question  of  Law 200 

315.  Appraiser — May  Hear  Evidence  on  Deductions 200 

316.  Evidence — ^Presumption  is  Absence  of  Proof  of  Jurisdictional 

Facts 200 

317.  Evidence — Proof  must    Clearly  Identify  Property   Alleged  to 

have  been  Transferred  by  Death 200 

318.  Evidence — ^Presumption  When  Deposit  in  Name  of  Husband  and 

Wife 201 

319.  Evidence — Must  Show  Income  Eeserved 201 

320.  Joint  Stock  Association — Eeal  Estate  to  be  Considered  in  Val- 

uation .   202 

321.  Appraiser — Eeport  May  be  Eeturned  for  Additional  Proof 202 

322.  Appraisement — Second  Appraisal  not  Permissible  to  Increase 

Value  of  Assets 202 

323.  Increase  or  Decrease  in  Value  after  Death  not  Material 202 

324.  Appraisement — Title  of  Case  Must  be  in  Name  of  Donor  of 

Power 202 

325.  Appraisement — Property  not  Included  in  Appraisement  can  be 

subsequently  appraised  203 

326.  Appraiser — ^If  in  Doubt  Eeports  Property  Taxable 203 

327.  Appraiser — ^Duty  Ended  with  Eeport 203 

328.  Misappropriation   of  Property  by  Executor   does  not  Eelieve 

from  Taxation  as  of  Death  of  Decedent 203 

329.  Market  Value — Fixed  as  of  date  of  Death 204 

330.  Fair  Market  Value — Listed  Stocks,  etc 204 

331.  Market  Value — Public  Sales  of  Securities 207 

332.  Market  Value — Synonymous  with  True  Value 207 

333.  Market  Value— Fixed  at  Transfer  or  Whenever  Ascertainable  207 

334.  When  no  Market  Value — Actual  Value  is  Taken 208 

335.  Market  Value — Isolated  Eecord  Sales  do  not  Determine 208 

336.  Market  Value — Where  Evidence  of  sales  is  not  Contradicted 

or  rebutted,  such  Evidence  must  Prevail 208 


xm 

Par.  Page. 

337.  Market  Value — Good  Will  can  be  Taken  into  Account  in  De- 

termining Market  Value 209 

338.  Eange  of  Market 209 

339.  Deductions — in  General  210 

340.  Amount  of  Administration  Fees  Allowed 210 

341.  Attorney's  Fees  and  Executor's  Commissions  for  Administra- 

tion and  Defending  Will — Claims  of  Non-residents 211 

342.  Deductions  must  be  Presented  at  Appraisement — not  afterward  213 

343.  Allowance  of  Decedent 's  Debts 213 

344.  Commissions  of  Administrator 213 

345.  Commissions  of  Administrator — May  be  Estimated 213 

346.  Expenses  of  Administration 214 

347.  Eeal  Estate  Taxes — Deductible 214 

348.  General    Eevenue   Taxes   Charged    to    Eeal   Estate    should   be 

deducted 215 

349.  General  Eevenue  Tax — ^When  not  Deductible  in   an  appraise- 

ment     215 

350.  Trustees — Commissions  not  Deductible 215 

351.  Deductions — Mortgages  not  Deductible  from  Personalty 216 

352.  Inheritance  Tax — Not  Deductible 216 

353.  Deductions — Inheritance    Tax    216 

354.  Burial  Lot — When  Cost  is  Deductible 216 

355.  Deductions — Second    Appraisement— Assets   Increased    by    De- 

feating Claims  against  Estate 216 

356.  Doubtful  Deductions  rejected 217 

357.  Deduction — Note  in  Litigation 217 

358.  Deductions — Legal  Services  for  Construction  of  Will 217 

359.  Deductions — Expenses  of  Litigation  between  Distributors  not 

Deductible 218 

360.  Ante-nuptial  Contract  does  not  Create  an  Indebtedness  of  the 

Estate 218 

361.  Debts    of    Non-resident   Estate — What    Deductible    from    New 

York  Assets  218 

362.  Deductions — Pro  Eates  in  Non-resident  Estates 218 

363.  Debts — When  Chargeable  to  Assets  at  Domicile  of  Non-resident 

Deductions  should  be  Proportioned 219 

364.  Apportionment    of    debts    between    Exempt    and    Non-exempt 

Property 219 

365.  When  one  Co-tenant  Furnishes  money  for  Improvements 219 

366.  Appeal — County  Judge  to  County  Court 220 

367.  County  Court  to  Supreme  Court 220 

368.  Practice  in  Cook  County,  Illinois 220 


369. 


Appeal — DeNovo — Common    Law  Proceeding— Bill   of   Excep- 
tions     220 


XIV 
Par.  Page. 

370.  Notice   of  Appeal — Attorney    for     State    Comptroller    cannot 

Waive  and  Confer  Jurisdiction 221 

371.  Appeal 221 

372.  Appeal — is  Necessary  to  Eeview  Correctness  of  Assessment — 

Deductions  must  be  Presented  to  Appraiser 221 

373.  Executor  may  Appeal 221 

374.  United  States   Supreme    Court — When    Construction   of   State 

Court  will  be  Followed 222 


CHAPTER  XIII. 

Fees  and  Salaries. 

375.  Section  Twelve 225 

376.  Clerk  of  the  County  Court— Fees. 226 

377.  Clerk  of  the  County  Court  of  Cook  County 227 

378.  May  Appoint  an  Inheritance  Tax  Clerk 227 

379.  Clerk  of  the  County  Court — ^Fees  When  the  People  Institute 

the  Proceeding   227 

CHAPTER  XIV. 

Misconduct  of  Appraiser. 

380.  Section  Thirteen  (Law  1909) 229 

CHAPTER  XV. 

Jurisdiction  of  County  Court. 

381.  Section    Fourteen    230 

382.  County  Court — Jurisdiction    230 

383.  County  Court— Jurisdiction — County  Judge  acts  as  Assessor..   230 

384.  County  Judge  first  Taking  Jurisdiction  Appraises  all  Property 

Eegardless   of   its   location 231 

385.  County  Court — Has  Power  to  issue  Commission  to  Take  Depo- 

sition  in   Non-resident   Estate   when   there    is    Appraisable 
Property  within  the  Court's  Jurisdiction 231 

386.  County  Judge — County  Wherein  Donee  of  Power  was  Domiciled 

Determines    Jurisdiction    232 

387.  County  Judge — Jurisdiction — Non-resident    232 

388.  The  Jurisdiction — Non-resident  Decedent 233 

389.  Surrogate  Court — will  Assume   Constitutionality  of  Statute..  233 


XV 


CHAPTER  XVI. 

COIXECTION   OF   DELIIvrQUENT   TaX. 
Par.  Page. 

390.  Section  Fifteen    234 

391.  Section  Sixteen    234 

392.  Enforcement  of  Collection — Contempt — Executors  and  Admin- 

istrators    235 

393.  County  Court — Can  Enforce  Payment  by  Contempt 236 

394.  Delinquents  Cannot  Object  to  Correctness  of  Assessment 236 

395.  Executor — Liability  Cannot  be  Determined  Under  Section  Six- 

teen, Laws  of  1885   (N.  Y.) 236 

CHAPTER  XVII. 

Infoemation  to  County  Treasurek. 

396.  Section  Seventeen  (Law  1909) 237 

CHAPTER  XVIII. 
Expense  for  Service  of  Summons. 

397.  Section    Eighteen    238 

398.  Sheriff — Cannot  be  reimbursed  by  State  Treasurer 238 

CHAPTER  XIX. 

Record  Kept  by  County  Judge. 

399.  Section  Nineteen  (Law  1909) 240 

CHAPTER  XX. 

County  Treasurer. 

400.  Section  Twenty  241 

401.  County  Treasurer  Must  Remit  all  Inheritance  Tax  Collections 

to  State  Treasurer  within  Reasonable  Time 241 

401a.  Remittance  can  be  enforced  by  Mandamus 241 

401b.  Illinois  Supreme  Court  has  determined  when  remittance  shall 

be  made    241 


XVI 


CHAPTEiR  XXI. 

Fees  of  County  Tkeasukeb — Duplicate  Tax  Receipts. 

Par.  Page. 

402.  Section  Twenty-one   (Law  1909) 244 

403.  Section  Twenty-two   (Law  1909) 244 

404.  Who   Entitled  to  Eeceipt — Filing  in  Different  Counties 244 

CHAPTEE  XXII. 

Settling  Question  of  Taxability  and  Lien — Statute 
OF  Limitations. 

405.  Section  Twenty-three   (Law  1909) 246 

405a.  Section  twenty-four   (Law  1909) 247 

406.  Lien   of   Tax — When   Tax  is   Postponed  lien   Continues   until 

Lifted  by  Payment — Tax  is  on  Succession 247 

407.  When  Tax  is  "Due  and  Legally  Demandable'* 247 

408.  Tax  a  Prior  Lien  to  Mortgage 248 

409.  When  State  Estopped  from  Collection 248 

410.  Liability  of  Heir  or  Beneficiary  not  Believed — Lien  Lifted  from 

Eeal    Estate    248 

411.  Executors,   Administrators,   Trustees    or   Beneficiaries   not   Be- 

lieved by  Statute  of  Limitations 250 

412.  When  the  Statute  is  a  Bar  to  Assessment 251 


CHAPTER  XXIIT. 

Tax  Presently  Payable — Refund  on  Subsequent 
Devolution. 

413.  Section    Twenty-five    253 

414.  Vested    Bemainder — what    Constitutes 254 

415.  Contingent  Interests — when  not  Taxable 255 

416.  Origin  of  Section   Twenty-five 256 

417.  Bemainders — Contingent  or  Defeasible  Interests  are  Presently 

Taxable  and  Tax  is  Forthwith  Payable  out  of  Trust  Fund- 
Constitutionality  Discussed   256 

418.  Contingent  Interests  Assessed  at  Highest  Bate  and  Taxed....   258 

419.  Tax — When  Payment  Diminishes  Corpus  of  Trust — not  Ground 

for  Objection 262 

420.  Payment  of  Tax  on  Annuities  out  of  Besiduum — Amount  Paid 

is  Eeturnable  by  Deducting  from  Annuity 262 


XVll 
Par.  Page. 

421.  Payment  of  Tax — By  whom  and  from  what  Property  Payable.  263 

422.  Payment  of  Tax — ^When  Payable  from  Income 263 

423.  Contingent    Estates — Eeview    of    Law    Relative    to    Taxation 

Thereof 263 

424.  Remainders  Vesting  under  Prior  Enactment  Not  Affected  by 

Subsequent  Law  Taxing  at  full  value 266 

425.  Values   on  Prior   Appraisement   not    Determinative    of   Subse- 

quently vesting  estates — no  Diminution  Allowed  on  Account 

of  Prior  Valuation  of  Life  Estates 268 

426.  Remainder — Effect  of  Prior  Valuation  on  Section  Appraisement 

of  Property  Postponed  for  Taxation 271 

427.  When  Contingent  or  Vested  Remainder  not  Presently  Taxable  272 

428.  Estates  Appraised  in  Illinois  after  July  1st,  1909 273 

CHAPTER  XXIV. 

Compromise  of  Tax. 

429.  Section  Twenty-six  (Law  1909) 274 

429a.  Clerical  error   275 

CHAPTER  XXV. 

Special  Guardian. 

430.  Section   Twenty-seven    276 

431.  Special  Guardian — when  Unnecessary 276 

432.  Special    Guardian — when    Necessary 276 


CHAPTER  XXYI. 

Exemption  of  Religious,  Educational,  Charitable  and 
Benevolent  Bequests. 

433.  Section    Twenty-eight    277 

434.  Exemptions  to  Religious,  Educational  and  Benevolent  Institu- 

tions—Amendment of  1901 — Illinois 278 

435.  Foreign   Educational    Corporation    Taxable — Amendment   1901 

Constitutional    278 

436.  Charity — Definition 282 

437.  Public  Charity — Statue  of  a  Horse  with  Drinking  Fountain..   282 

438.  Religious  Corporation — when  Organized  under  Laws  of  Foreign 

State 283 

439.  Foreign  Corporations — United  States  a  Foreign  Corporation — is 

taxable  as  a  Beneficiary 284 


XVlll 
Par.  -• 

440.  Foreign  Eeligious  and  Charitable  Corporations — Fact  of  Hold- 

ing Property  in  Taxing  State  Immaterial 284 

441.  Exemptions — Foreign  Charity  with  Branch  in  Taxing  State...   285 

442.  Charitable  Bequests — When  Bequest  to  Local  Branch  of  a  For- 

eign Corporation  is  Exempt 286 

443.  Charitable  Bequests — ^Law  Construed  to  Favor  Exemption,...   286 

444.  Educational  in  Part — When  one  of  the  Purposes  of  Corporation 

is  Educational  286 

445.  Exemption — Municipal  Corporation  not  Exempt 287 

446.  Bequest  for  saying  Mass  is  a  Charitable  Bequest  and  Exempt 

from   Taxation    287 

447.  Foreign  Corporation — ^Property  within  the  Taxing  State 289 

448.  Young  Men 's  Christian  Association — when  Exempt 290 

CHAPTER  XXVII. 

Certified  Copy  of  Papers — Repeal. 

449.  Section  Twenty-nine  (Law  1909) 291 

450.  Section  Thirty  (Law  1909) 291 

451.  Section  Thirty-one  (Law  1909) 292 

452.  Amendatory  Act  Does  Not  Believe  Previously  vested  Interests  292 

453.  Statutes — ^When  Eevision  Amounts  to  Continuation  of  the  Act 

Superseded 292 

454.  New   Enactment   Embodying  the   same   Principle   of  Law  Ee- 

pealed 293 

CHAPTER  XXVIII. 

Practice  and  Procedure. 

455.  The   General  Subject 297 

456.  First  Contact  with  the  Law  Usually  Arises  out  of  Section  Nine  297 

457.  Penalty  for   Non-compliance  is   Incurred   when 298 

458.  State  has  an  Interest  in  every  Estate 299 

459.  First    Question   with   Depositary,    Corporation,   Association    or 

Bailee  is  Liability 299 

460.  Estimation  of  Tax  and  Eetention  to  Cover 300 

461.  Basis  for  Issuing  Consent — in  General 301 

462.  Administration  of  Section  Nine — Two  Districts 302 

463.  Springfield     District — Business      Transacted      at      Springfield, 

Illinois 302 

464.  Book  of  Eecord  Transfers 302 

465.  Chicago  District— Comprises  Cook  County.    All  Business  Trans- 

acted by  Inheritance  Tax  Attorney  at  Chicago.     Tangible 
Property  or  Evidences  thereof 303 


XIX 

Par.  ♦      Page. 

466.  Book  or  Eecord  Transfers 303 

467.  Communication  to  Wrong  District 304 

468.  Consent — only  Lifts  Liability  for  Inheritance  Tax 304 

469.  Notice 304 

470.  Springfield  District — How  to  Obtain  Consent  to  Transfer — De- 

ceased a  resident  or  Non-resident  of  Illinois 305 

471.  No  Administration   306 

472.  Deceased    Eesident    of    Illinois.      Administration,    Transfer    of 

Shares  of  Stock  and  Bonds  on  the  books  of  the  Corporation.   306 

473.  Decedent  a  Non-resident  of  Illinois — ^Book  Transfer  of  Stock  or 

Kegistered  bonds 307 

474.  Form  Administration  Aflidavit  required  in  Springfield  District.   308 

475.  No  Administration  Affidavit.     Springfield  District 310 

476.  Form  ''SS''  Notice 313 

477.  Chicago   District — All  Business  Transacted  with  Joint  Eepre- 

sentative  of  Attorney  General  and  State  Treasurer,  at  Chi- 
cago, Dlinois   314 

478.  Bank  Deposits — Deceased  a  Resident  of  Illinois — ^Administra- 

tion of  Estate  in  Illinois 315 

479.  Transfer— What  Constitutes 315 

480.  Administration  Affidavit — Chicago  District 316 

481.  Bank   Deposits — Deceased   Resident   of   Illinois — No   Adminis- 

tration Pending 317 

482.  No  Administration  Affidavit — Chicago  District 318 

483.  Bank  Deposits — Deceased  a  Non-resident   of  Illinois — Admin- 

istration or  No  Administration 321 

484.  Securities,  Deposits  or  other  Assets  (other  than  bank  deposits, 

but  including  collateral)  under  control  or  in  Possession  of  a 
Bank,  Trust  Company,  Corporation,  Institution  or  Person — 
Decedent  a  Resident  or  Non-resident  of  Illinois — Adminis- 
tration or  No  Administration 321 

485.  Residence  in  Illinois — Administration 322 

486.  Residence  in  Illinois — No  Administration 322 

487.  Security 322 

488.  Reports  of  Examiners 322 

489.  Non-residents— When  Decedent  is  a  Non-resident  of  Illinois  and 

Regardless  of  whether  there  is  or  is  not  Administration  of 
the  Estate.  Action  of  the  Tax  Office  on  Receipt  of  Form 
''SS'^  Notice    323 

490.  Deposit — When  made  Consent  issues 325 

491.  Deposit  Returned  if  no  Tax 325 

492.  Delay  in  Issuing  Consents 325 

493.  Book   Transfers  of   Stock   and   Registered  Bonds — Decedent   a 

Resident  or  Non-resident — Administration  and  no  Adminis- 
tration     325 

494.  Non-resident  Estates 326 


XX 

Par.  Page. 

495.  Safe  Deposit  Company — Storage  Company — Decedent  a  Eesident 

or  Non-resident  of  Illinois — Administration  or  No  Adminis- 
tration     327 

496.  When    Consent    Issues 327 

497.  Emergency  Examinations    328 

498.  Deposit    System     329 

499.  Eecommendation    to    Non-residents 330 

500.  Afl&davit  Answering  Non-resident  Questions 331 

501.  Common  Mistakes  in  Preparing  Affidavit 331 

502.  Delay  331 

503.  Section  Eleven.     In  General  Duty  of  Lawyer.     Investigation. 

Appraisement.  Evidence.  Special  Guardian.  Appraiser's 
Eeport.  Order  of  Tax.  Tax  Keceipt.  Appeal  to  County 
Court.     Appeal  to  Supreme   Court 332 

504.  Appraisement  under  Section  Eleven 333 

505.  Legal  Eepresentative,  Beneficiary  and  State  "Interested  Par- 

ties''       334 

506.  Appraiser 335 

507.  Hearing  Eooms — Appraisements   had   Therein 335 

508.  Hearing  before  Appraiser — Non-resident  cases 336 

509.  Eesident  cases   336 

510.  Close    corporation    stock 338 

511.  Eecord    of    Appraisement 338 

512.  Objections   to    Appraiser's    Eeport    cannot   be    Argued    before 

County  Judge    339 

513.  Inventories — Good  Practice  in  Tax   Matters 339 

514.  Description   of  Property  in   Inventories 340 

515.  Stocks    340 

516.  Bonds   340 

517.  Insures  Immediate  Consent  to  Transfer 340 

518.  Appraiser — Involuntary    Appointment — Investigation    by    Tax 

Office    341 

519.  Life  Estates  and  Eemainders — How  Value  Determined 341 

520.  Value  of  an  Annuity  of  One  Dollar  on  a  single  life,  According 

to   the    Carlisle    Table    of   Mortality 342 

521.  How  to  Ascertain  Present  Value  of  Annuity  or  Estate  for  Life 

— and  Eemainder   343 

522.  Valuation  of  Annuity  for  a  Fixed  Period  of  Years 344 

523.  Fixed    Annuity   Table 344 

524.  Appeal   to    County   Court 345 

525.  Appraiser 's  Eeport  Used  as  Evidence 346 

526.  Appeals   to   Supreme   Court 347 

527.  Section    Twenty-three    348 

528.  Proceeding  to  Quiet  Question  of  Taxability— in  General 348 


XXI 

Par.  Page. 

529.  The   Other  Section   Providing  Eemedy   to   Quiet   Question   of 

Taxability   350 

530.  Procedure  for  Determining  Taxability*  Under  Section  11 351 

531.  Property   ''In   this   State'' 351 

532.  Transferred  within  the  Meaning  of  this  Act 351 

533.  Interested    Party    352 

534.  Petition — ^Form — Allegations — Proof  under  Section  23 353 

535.  Description  of  Property  in  Copy  of  Inventory  made  a  Part 

of   Petition    353 

536.  Form  Petition  for  No  Tax. 354 

537.  Petition  for  No  Tax — Non-resident  Decedent 360 

538.  Petition  for  No  Tax — Eelation  of  Parent  to  Beneficiary 361 

539.  Order  of  No  Tax 361 

540.  Entry  of  No  Tax  Order 364 


CHAPTER  XXIX. 

Attorney  Geneeatv  Opinions. 

543.  State's  Attorney — Fees  in  General — Deposit   to  stop  Interest  366 

544.  Interest — Euns  until  Tax  is  Paid 374 

545.  Deductions — ^When  Expense  for  Monument  cannot  be  Deducted  375 

546.  Appraiser    Cannot   Employ  Lawyer   and    Charge   his   Services 

against   State    376 

547.  Tax — When  Postponed  and  When  Immediately  Collectible ....  380 

548.  Public  Administrator  has  no  General  Duty  to  Enforce  Inheri- 

tance  Tax   Law 383 

549.  A  Will  is  not  an  Asset  Within  the  Meaning  of  Section  Nine 

of  the  Inheritance  Tax  Act,  and  may  be  Eemoved  for  the 
Purposes  of  Probate  Without  the  Consent  of  the  Attorney 
General  and  State  Treasurer 384 

550.  Widow 's  Award  is  Taxable 385 

551.  Eef und  of  Tax  Erroneously  Paid 387 

552.  Partnership  Assets  in  Foreign  State  When  Owned  by  Deceased 

Eesident  of  Illinois 390 

CHAPTER  XXX. 

Forms — Tax  Law  of  1895  as  Amended  in  1901 — Court 
OF  Claims  Decision  on  Refund  of  Tax. 

553.  Form    Composition    Agreement 391 

553a.  Petition  for  Appeal  from  County  Judge's  Order  of  Tax 395 

553b.  Order  Allowing  Appeal  from  County  Judge's  Order  to  County 

Court   396 


XXll 

Par.  Page. 

554.  Bond— Appeal   to   County   Court 396 

555.  Order  of  County  Judge  Appointing  Appraiser 397 

556.  Oath   of  Appraiser 398 

557.  Appraiser 's  Notice  of  Hearing 399 

558.  Appraiser 's    Eeport    399 

559.  Appraiser's  Eeport — Schedule  One 400 

660.     Appraiser 's  Eeport — Schedule  Two 400 

561.  Appraiser 's   Eeport — Schedule    Three 401 

562.  Appraiser's   Eeport — Schedule  Four 401 

563.  Appraiser 's  Eeport — Summary    401 

564.  Appraiser 's    Eeport — Schedule    Five 403 

565.  Appraiser's   Eeport — Exhibit   "A,"    Certificate   of  Service   of 

Process  402 

566.  Appraiser's  Eeport— Close  of  Eeport 403 

567.  County  Judge 's  Order  of  Tax 403 

568.  Order    Fixing    Tax 403 

569.  Close    of    Order. 404 

570.  County  Judge 's  Notice  of  Tax 404 

571.  County  Judge's  Certificate  of  Mailing  Notice  to  Person  Taxed  405 

572.  Inheritance  Tax  Law  of  1895,  as  amended  1901 405 

573.  Opinion  of  Court  of  Claims  in  Griffith  ex.  v.  State  of  Illinois.  418 


THE 

INHERITANCE  TAX  LAW 
DIGEST 


CHAPTER  I, 


HiSTORiCAi. — Origin  of  Illinois  Laws- 
General  Subject. 


-Succession — The 


1.  Historical. 

2.  The  United  States. 

3.  The    Inheritance    Tax   Law   of 

Illinois — Its  Origin  and  Con- 
stitutionality. Nature  of  the 
Law  in  General. 

4.  Constitutionality  —  New  York 

Law  of  1885. 

5.  Act   of    1885    construed   to   ex- 

clude non-residents '  property. 

6.  Amendment  of  1887  designed  to 

cover  non-residents'  prop- 
erty. 

7.  Tax  extended  to  lineals. 

8.  Illinois  Law  of  1895  taken  from 

New  York. 

9.  Constitutionality  of  Illinois  law 

of  1895. 

10.  Illinois  Law  of  1895  held  con- 

stitutional by  the  United 
States  Supreme  Court. 

11.  Amendment  1901 — Illinois. 

12.  Illinois   Law   in   force   July    1, 

1909. 

13.  Scope  of  the  Law. 

14.  State's  Interest. 

15.  Eight  to  take  property  is  regu- 

lated by  the  state. 

16.  Construction — in    favor    of   the 

taxpayer. 


17.  When  against  the  citizen. 

18.  Tax— Controlled  by  Statute  in 

force  at  death  of  decedent. 

19.  Intestate  Laws— Meaning  of. 

20.  Succession — is  governed  by  the 

law  of  domicile. 

21.  Succession — governed  by  law  of 

domicile. 

22.  Succession — governed  by  law  of 

domicile. 

23.  Succession — cannot  be  changed 

by  compromise  among  bene- 
ficiaries. Money  paid  in  com- 
promise not  a  deduction. 

24.  Compromise    of    will    contest — 

does  not  affect  law  of  suc- 
cession. 

25.  Curtesy — does  not  pass  by  will 

or  intestate  laws. 

26.  General     Eevenue     Law — deci- 

sions under  not  necessarily 
in  point  in  inheritance  tax 
cases. 

27.  Transfer  Tax  Act  of  1892   (N. 

Y.)   not  retroactive. 

28.  Eemainders  created  prior  to  tax 

law  are  not  taxable  by  sub- 
sequent enactment. 

29.  When  State  Supreme  Court  Pi- 

nal on  Matters  of  Taxation. 


1.     Historical. 

The  method  of  providing  revenue  by  taxation  of  inher- 
itances is  of  great  antiquity.  The  idea  of  the  tax  is  be- 
lieved to  have  originated  with  the  Egyptians. 

It  is  known  that  Inheritance  Tax  Laws  were  estab- 


lished  in  Erome  as  early  as  the  year  6  A.  D.,  and  that  in 
the  time  of  Hadrian  117  to  138  A.  D.,  the  administration 
of  such  a  law  developed  the  practical  question  of  allow- 
ing funeral  expenses  as  a  deduction  from  the  taxable 
property,  it  being  held  that  reasonable,  and  not  extrava- 
gant sums,  spent  for  burial  and  monument,  were  deduct- 
ible. The  Inheritance  Tax,  2d  ed.,  page  14,  by  Max  West 
(Columbia  University). 

Gibbon's  Eoman  Empire,  Vol.  1,  ch.  6,  pages  158-9, 
gives  the  following  account  of  Inheritance  Tax  legisla- 
tion in  Eome : 

**When  Augustus  resolved  to  establish  a  perma- 
nent military  force  for  the  defense  of  his  govern- 
ment against  foreign  and  domestic  enemies,  he  insti- 
tuted a  peculiar  treasury  for  the  pay  of  the  soldiers, 
the  rewards  of  the  veterans,  and  the  extraordinary 
expenses  of  war.  The  ample  revenue  of  the  excise, 
though  peculiarly  appropriated  to  those  uses,  was 
found  inadequate.  To  supply  the  deficiency,  the 
emperor  suggested  a  new  tax  of  five  x>er  cent,  on  all 
legacies  and  inheritances.  But  the  nobles  of  Rome 
were  more  tenacious  of  property  than  of  freedom. 
Their  indignant  murmurs  were  received  by  Augus- 
tus with  his  usual  temper.  He  candidly  referred 
the  whole  business  to  the  Senate,  and  exhorted  them 
to  provide  for  the  public  service  by  s.ome  other  expe- 
dient of  a  less  odious  nature.  They  were  divided 
and  perplexed.  He  insinuated  to  them  that  their 
obstinacy  would  oblige  him  to  propose  a  general 
land-tax  and  capitation.  They  acquiesced  in  silence. 
The  new  imposition  on  legacies  and  inheritances  was, 
however,  mitigated  by  some  restrictions.  It  did  not 
take  place  unless  the  object  was  of  a  certain  value, 
most  probably  of  fifty  or  one  hundred  pieces  of  gold, 
nor  could  it  be  exacted  from  the  neares.t  of  kin  on 
the  father's  side.  When  the  rights  of  nature  and 
poverty  were  thus  secured,  it  seemed  reasonable 
that  a  stranger,  or  a  distant  relation,  who  acquired 
an  unexpected  accession  of  fortune,  should  cheer- 


fully  resign  a  twentieth  part  of  it  for  the  benefit  of 
the  State. 

Such  a  tax,  plentiful  as  it  must  prove  in  every 
wealthy  community,  was  most  happily  suited  to  the 
situation  of  the  Eomans,  who  could  frame  their  arbi- 
trary wills,  according  to  the  dictates  of  reason  or 
caprice,  without  any  restraint  from  the  modern  fet- 
ters of  entails  and  settlements.'' 

The  Inheritance  Tax  Laws  of  Holland  were  instru- 
mental in  causing  England  to  enact  legislation  of  a  some- 
what similar  character,  and  during  the  reign  of  George 
III,  the  younger  Pitt  made  the  tax  one  on  the  transfer 
of  personal  property  and  charged  executors  and  admin- 
istrators with  the  collection  and  payment. 

The  English  law  has  since  divided  itself  into  a  number 
of  classifications,  the  whole  system  being  generally 
known  as  *^ death  duties." 

Some  of  the  colonies  of  Great  Britain  have  adopted 
this  system  of  taxation,  two  of  which,  Australia  and  New 
Zealand,  secure  a  large  part  of  their  revenue  from  death 
duties. 

2.     The  United  States. 

A  Federal  Inheritance  Tax  Law  was  passed  by  Con- 
gress in  our  early  history,  but  was  shortly  repealed.  It 
was  not  until  1862,  by  the  War  Revenue  Act  that  the  In- 
heritance Tax  became  a  factor  for  the  production  of  rev- 
enue. The  rates  were  increased  in  1864,  and  in  1866  a 
penalty  was  provided  for  the  non-compliance  of  execu- 
tors and  administrators  to  report  estates  and  property 
under  their  control  to  the  Internal  Revenue  Collector. 
These  laws  were  repealed  in  1870. 

The  Spanish  War  revenue  bill  of  1898  provided  for  a 
tax  on  inheritances.  This  law  was  repealed  in  1902,  and 
at  the  present  time  there  is  no  Federal  Law  providing 


for  such  a  tax.  (See  The  Inheritance  Tax,  2nd  ed.,  87 
by  Max  West,  for  evolution  of  Inheritance  Tax  Legisla- 
tion.) 

3.  Tlie  Inheritance  Tax  Law  of  Illinois.  Its  origin 

and  Constitutionality.     Nature  of  the  Law 
in  General. 

The  first  Inheritance  Tax  Law  in  Illinois,  was  approved 
June  15th,  1895,  and  went  into  force  July  1st,  1895.  Its 
provisions  were  largely  taken  from  the  New  York  Law, 
1885,  entitled — *^An  Act  to  Tax  Gifts,  Legacies  and  Col- 
lateral Inheritances,  in  effect  June  30,  1885,  as  amended 
in  1887  and  1891. 

The  Act  of  1885  created  a  tax  on  collaterals  and  ex- 
empted lineals,  including  in  the  exemption,  certain  other 
designated  persons. 

4.  Constitutionality^ — New  York  Law  of  1885. 

The  Court  of  Appeals  in  passing  upon  the  constitu- 
tionality of  the  New  York  Act  of  1885,  held: 

*  ^  It  is  not  very  important  to  determine  in  this  case 
whether  the  Act  of  1885  is.  to  be  regarded  as  impos- 
ing a  tax  upon  property  or  upon  the  succession  or 
devolution  of  property,  by  will  or  intestacy.  In 
either  case  it  is  a  special  tax.  In  the  one  case  it  is  a 
tax  upon  the  particular  class  of  property,  and  in 
the  other  case  a  tax  upon  the  succession  or  devolu- 
tion of  property,  or  the  right  to  receive  property  in 
the  cases  mentioned  in  the  statute.  Whether  it  be 
one  or  the  other  it  is  free  from  constitutional  objec- 
tion. It  has  never  been  questioned  that  the  Legis- 
lature can  impose  a  tax  upon  all  sales  of  property, 
upon  all  incomes,  upon  all  acquisitions  of  property, 
upon  all  business  and  upon  all  transfers.  Taxes  of 
a  similar  character  were  quite  extensively  imposed 
by  the  Acts  of  Congress  passed  during  the  late  Civil 
War.    If  this  be  regarded  as  a  tax  upon  property. 


5 

then  it  is  free  from  constitutional  objection  if  it  be 
equally  imposed  and  properly  apportioned  upon  all 
the  property  of  the  class  to  which  it  belongs.  A  tax 
imposed  for  the  general  welfare  upon  a  particular 
house,  or  the  houses  of  a  particular  neighborhood, 
would  be  amenable  to  constitutional  objection,  but  if 
imposed  upon  all  the  houses  in  the  State,  then  it  is 
a  tax  imposed  upon  all  the  property  of  that  class, 
and  is  amenable  to  no  objection.''  Matter  of  Mc- 
Pherson,  104  N.  Y.  306;  Wallace  v.  Meyers,  38  Fed. 
Eep.  184. 

5.  Act  of  1885  Construed  to    Exclude    Non-Resi- 

dent's Property. 

This  law,  as  interpreted  by  the  Court  of  Appeals,  was 
not  broad  enough  to  include  property  in  New  York  owned 
by  a  non-resident  at  death.  Matter  of  Enston,  113  N. 
Y.  174. 

6.  Amendment  of  1887  Desig:ned  to  Cover  Non- 

Resident's  Property. 

By  the  amendment  of  1887,  the  New  York  Legislature 
added  to  the  first  section,  among  other  things,  the  follow- 
ing: ^*0r  if  such  decedent  was  not  a  resident  of  this 
State  at  the  time  of  death"  which  property,  **or  any 
part  thereof"  shall  be  within  the  State,  etc.  The  Court 
of  Appeals  in  passing  upon  the  scope  of  this  amendment 
held  it  to  apply  to  miscellaneous  stocks  and  bonds  of  a 
non-resident  held  in  New  York  at  the  time  of  death.  It 
did  not  appear  in  this  case  where  the  corporations,  which 
issued  the  stocks  and  bonds,  were  organized.  (Matter 
of  Eomaine,  127  N.  Y.  80.) 

7.  Tax  Extended  to  Lineals. 

The  amendment  of  1891  (New  York)  extended  the  tax 
to  lineals,  allowing  an  exemption  of  $10,000.00. 


6 

8.     Illinois  Law  of  1895  Taken  from  New  York. 

Generally  speaking  it  may  be  said  that  Illinois  adopted 
as  its  law  of  1895,  tlie  New  York  Law  of  1885  as  amended 
in  1887  and  1891,  substituting  its  own  rates  and  exemp- 
tions, and  certain  other  provisions,  appearing  at  that 
time  to  fit  the  general  policy  of  the  State. 

0.     Constitutionality  of  Illinois  liaw  of  1895. 

In  Kochersperger  v.  Drake,  167  111.  122,  the  Law  of 
1895  was  reviewed  by  the  Supreme  Court  of  Illinois  and 
declared  constitutional.  The  Court  in  deciding  the  ques- 
tions involved,  said: 

^^The  question  presented  by  this  appeal  involves 
the  constitutionality  of  the  act  entitled  *^An  Act  to 
Tax  Gifts,  Legacies  and  Inheritances  in  certain 
cases,  and  to  provide  for  the  collection  of  same,'' 
approved  June  15,  1895. 

The  existence  of  the  common  law  within  the  State 
of  Illinois,  results  from  the  provisions  of  Chapter  28 
of  the  Revised  Statutes,  which  declare  that  the  com- 
mon law  of  England,  and  all  statutes  of  a  general 
nature  made  prior  to  the  fourth  year  of  James  I, 
shall  be  the  rule  of  decision,  and  shall  be  considered 
as  of  full  force  until  repealed  by  legislative  author- 
ity. By  that  authority  chapter  39  of  the  Revised 
Statutes,  entitled  **An  Act  in  regard  to  the  descent 
of  property,"  and  chapter  148,  entitled  **An  act  in 
regard  to  wills, ' '  were  enacted,  which  in  effect  repeal 
the  common  law  in  reference  to  inheritance,  and  also 
repeal  the  statute  enacted  prior  to  the  fourth  year 
of  James  I  in  reference  to  devises.  There  is  not  in 
force  in  this.  State  under  Chapter  28  any  law  provid- 
ing for  the  descent  or  devise  of  property.  The  laws 
of  descent  and  the  right  to  devise  and  take  under  a 
will  within  the  State  of  Illinois  owe  their  existence 
to  the  statute  law  of  the  State.  The  right  to  inherit 
and  the  right  to  devise  being  dependent  on  legisla- 
tive acts,  there  is  nothing  in  the  constitution  of  this 
State  which  prohibits  a  change  of  the  law  with  refer- 


ence  to  those  subjects  at  the  discretion  of  the  law- 
making power.  The  laws  of  descent  and  devis.e  be- 
ing the  creation  of  the  statute  law,  the  power  which 
creates  may  regulate  and  may  impose  conditions  or 
burdens,  on  a  right  of  succession  to  the  ownership  of 
property  to  which  there  has  ceased  to  be  an  owner 
because  of  death,  and  the  ownership  of  which  the 
State  then  provides  for  by  the  law  of  descent  or  de- 
vise. The  imposition  of  such  a  condition  or  burden 
is  not  a  tax  upon  the  property  itself,  but  on  the  right 
of  succession  thereto.  To  deny  the  right  of  the  State 
to  impose  such  a  burden  or  condition  is  to  deny  the 
right  of  the  State  to  regulate  the  administration  of  a 
decedent's  estate.  When,  by  the  act  of  June  15, 
1895,  for  the  taxation  of  gifts,  legacies  and  inherit- 
ances, in  certain  cases,  the  legislature  prescribed  that 
a  certain  part  of  the  estate  of  the  deceased  person 
should  be  paid  to  the  treasurer  of  the  proper  county 
for  the  use  of  the  State,  it  was  in  effect  an  assertion 
of  sovereignty  in  the  estate  of  deceased  persons. 
Whether  to  be  levied  and  determined  as  a  tax  or 
penalty,  the  principle  is,  that  where  one  owning  an 
estate  dies,  that  estate  is  to  be  as&essed  in  accord- 
ance with  the  provisions  of  the  act  and  the  tax  to 
be  paid  for  the  right  of  inheritance.  The  amount 
reserved  to  the  State  from  the  estate  of  a  deceased 
owner  is  not  a  tax  on  the  estate,  but  on  the  right  of 
succession. 

By  the  provisions  of  the  constitution  of  1870,  (Art. 
9,  Sec.  1),  it  is  provided:  *The  General  Assembly 
shall  provide  such  revenue  as  may  be  needful  by 
levying  a  tax,  by  valuation,  so  that  every  person  and 
corporation  shall  pay  a  tax  in  proportion  to  the 
value  of  his,  her  or  its  property,  such  value  to  be 
ascertained  by  some  person  or  persons  to  be  elected 
or  appointed  in  such  manner  as  the  General  Assem- 
bly shall  direct,  and  not  otherwise;  but  the  General 
Assembly  shall  have  power  to  tax  peddlers,  auction- 
eers., brokers,  hawkers,  merchants,  commission  mer- 
chants, showmen,  jugglers,  inn-keepers,  grocery 
keepers,  liquor  dealers,  toll  bridges,  ferries,  insur- 
ance, telegraph  and  express  interests  or  business, 
vendors  of  patents  and  persons  or  corporations  own- 


8 

ing  or  using  franchises  and  privileges,  in  such  man- 
ner as  it  shall  from  time  to  time  direct  by  general 
law,  uniform  as  to  the  class  upon  which  it  operates.' 
And  Section  2  provides:  ^The  specification  of  the 
objects  and  subjects  of  taxation  shall  not  deprive 
the  General  Assembly  of  the  power  to  require  other 
subjects  or  objects  to  be  taxed  in  such  manner  as 
may  be  consistent  with  the  principles,  of  taxation 
fixed  in  this  constitution.' 

Under  these  provisions  of  the  constitution  it  is  in- 
sisted that  the  levy  of  the  succession  tax  which  is 
required  to  be  made  by  valuation,  so  that  every  per- 
son and  corporation  shall  pay  a  tax  in  proportion 
to  the  value  of  his,  her  or  its  property,  and  that 
such  law  shall  be  uniform  as  to  the  class  upon  which 
it  operates,  is  defeated  by  the  provisions  of  the  stat- 
ute above  quoted.  That  statute  provides  certain 
classes  of  property  which  were  a  part  of  an  estate 
shall  be  exempt  from  taxation  under  these  provi- 
sions, and  when  the  legislature  provides  other 
classes  of  property,  s.ome  of  which  shall  pay  one  dol- 
lar per  hundred,  others  two,  others  three  and  others 
four,  and  still  others  five,  and  again  others  six  dol- 
lars per  hundred,  six  different  classes  are  created, 
under  and  by  which  a  tax  is  levied  by  valuation  on 
the  right  of  succession  to  a  separate  class,  of  prop- 
erty. The  class  on  which  a  tax  is  thus  levied  is  gen- 
eral and  uniform,  and  pertains  to  all  species  of 
property  included  within  that  class.  A  tax  which 
affects  the  property  within  a  specific  class  is  uni- 
form as  to  that  class,  and  there  is  no  provision  of 
the  constitution  which  precludes  legislative  action 
from  assessing  a  tax  on  that  particular  class.  By 
this  act  of  the  legislature  six  classes  of  property  are 
created  heretofore  absolutely  unknown.  It  is  those 
classes  of  property  depending  upon  the  estate  owned 
by  one  dying  possessed  thereof  which  the  State  may 
regulate  as  to  its  descent  and  the  right  to  devise. 
The  tax  assessed  on  classes  thus  created  is  abso- 
lutely uniform  on  the  classes  upon  which  it  operates, 
and  under  the  provisions,  of  the  statute  is  to  be  de- 
termined by  valuation,  so  that  every  person  and  cor- 


poration  shall  pay  a  tax  in  proportion  to  the  value 
of  his,  her  or  its  property  inherited,  and  is  not  in- 
consistent with  the  principle  of  taxation  fixed  by  the 
constitution,  and  is  clearly  within  the  sections  of  the 
constitution  quoted.  No  want  of  uniformity  with 
one  living  who  owned  property  can  be  urged  as  a 
reason  why  the  statute  makes  an  inconsistent  rule. 
No  person  inherits,  property  or  can  take  by  devise 
except  by  the  statute,  and  the  State,  having  power 
to  regulate  this  question,  may  create  classes  and  pro- 
vide for  uniformity  with  reference  to  classes  which 
were  before  unknown.     *     *     * 

We  hold  the  act  entitled  *An  act  to  tax  gifts,  lega- 
cies and  inheritances  in  certain  cases,  and  to  provide 
for  the  collection  of  same,'  approved  June  15,  1895, 
to  be  consistent  with  the  constitution  of  the  State 
of  Illinois." 

10.     Illinois  Law  of  1895  Held  Constitutional  by 
the  United  States  Supreme  Court. 

The  question  of  constitutionality  of  the  Law  of  1895 
was  determined  in  Magoun  v.  Illinois  Trust  and  Savings 
Bank,  170  U.  S.  283.  The  opinion  of  the  Court  with  ref- 
erence to  the  history,  classification  of  exemptions,  state's 
right  to  regulate  succession,  and  constitutionality  of  the 
Law,  is  in  part : 

*^  Legacy  and  inheritance  taxes  are  not  new  in  our 
laws.  They  have  existed  in  Pennsylvania  for  over 
sixty  years  and  have  been  enacted  in  other  states. 
They  are  not  new  in  the  laws  of  other  countries.  In 
State  V.  Alston,  94  Tenn.  674,  Judge  Wilkes  gave  a 
short  history  of  them  as  follows :  *  Such  taxes  were 
recognized  by  the  Roman  Law.  Gibbon's  Decline 
and  Fall  of  the  Roman  Empire,  Vol.  I,  pp.  163-164. 
They  were  adopted  in  England  in  1780  and  have 
been  much  extended  since  that  date.  DowelPs  His- 
tory of  Taxation  in  England,  148;  Acts  20,  George 
III,  C.  28;  45  George  HI,  c.  28;  16  and  17  Victoria, 
c.  51;  Green  v.  Craft,  2  H.  Bl.  30;  Hill  v.  Atkinson, 
2  Merivale  45 ;  such  taxes  are  now  in  force  generally 


10 

in  the  countries  of  Europe.  (Review  of  Reviews, 
Feb.,  1893.)  In  the  United  States  they  were  enacted 
in  Pennsylvania  in  1826 ;  Maryland,  1844 ;  Delaware, 
1869;  West  Virginia,  1887,  and  still  more  recently  in 
Connecticut,  New  Jersey,  Ohio,  Maine,  Massachu- 
setts, 1891;  Tennessee  in  1891,  chapter  25,  now  re- 
pealed by  chapter  174,  Acts  1893.  They  were 
adopted  in  North  Carolina  in  1846,  but  repealed  in 
1883.  Were  enacted  in  Virginia  in  1844,  repealed 
in  1855,  re-enacted  in  1863,  and  repealed  in  1884'. 
Other  states  have  also  enacted  them,  Minnesota  by 
constitutional  provision. 

The  constitutionality  of  the  taxes  have  been  de- 
clared, and  the  principles  upon  which  they  are  based 
explained  in  U,  8.  v.  Perkins,  163  U.  S.  625,  628; 
Strode  v.  Commonwealth,  52  Penn.  St.  181;  Eyre  v. 
Jacob,  14  Grat.  422;  Schoolfield  v.  Lynchburg,  78 
Virginia,  366 ;  State  v.  Dairy mple,  70  Maryland,  294 ; 
Clapp  V.  Mason,  94  U.  S.  589;  in  re  Merriam's  Es- 
tate, 141  N.  Y.  479;  State  v.  Hamlin,  86  Maine,  495; 
State  y.  Alston,  94  Tenn.  674;  In  re  Wilmerding,  117 
Cal.  281;  Dos  Passos  Collateral  Inheritance  Tax,  20; 
Minot  V.  Winthrop,  162  Mass.  113;  Gelsthorpe  v. 
Furnell  (Montana),  51  Pac.  Rep.  267.  See  also 
Scholey  v.  Rew,  23  Wall.  331. 

It  is  not  necessary  to  review  these  cases  or  state 
at  length  the  reasoning  by  which  they  are  supported. 
They  are  based  on  two  principles :  1.  Any  inherit- 
ance Tax  is  not  one  on  property,  but  one  on  the  s.uc- 
cession.  2.  The  right  to  take  property  by  devise  or 
descent  is  the  creature  of  the  law,  and  not  a  natural 
right — a  privilege,  and  therefore  the  authority  which 
confers  it  may  impose  conditions  upon  it.  From 
these  principles  it  is  deduced  that  the  states  may  tax 
the  privilege,  discriminate  between  relatives,  and  be- 
tween these  and  strangers,  and  grant  exemptions; 
and  are  not  precluded  from  this  power  by  the  provi- 
sions of  the  respective  state  constitutions  requiring 
uniformity  and  equality  of  taxation. 

The  second  principle  was  given  prominence  in  the 
arguments  at  bar.  The  appellee  claimed  that  the 
power  of  the  State  could  be  exerted  to  the  extent  of 
making  the  State  the  heir  to  everybody,  and  the  ap- 


11 

pellant  asserted  a  natural  right  of  children  to  in- 
herit. Of  the  former  proposition  we  are  not  re- 
quired to  express  an  opinion.  Nor  indeed  of  the  lat- 
ter, for  appellant  conceded  that  testamentary  dispo- 
sition and  inheritance  were  subject  to  regulation. 
However,  as  pertinent  to  the  subject,  decisions  of 
this  Court  may  be  cited. 

In  U,  8,  V.  Fox,  94  U.  S.  315,  320,  a  law  of  the  State 
of  New  York  confining  devises  to  natural  persons 
and  corporations  created  under  its  laws  was  consid- 
ered, and  a  devise  of  land  to  the  United  States  was 
held  void.    The  Court  said : 

*  The  power  of  the  State  to  regulate  the  tenure 
of  real  property  within  her  limits,  and  the 
modes  of  its  acquisition  and  transfer,  and  the 
rules  of  its  descent,  and  the  extent  to  which  a 
testamentary  disposition  of  it  may  be  exercised 
by  its  owners,  is  undoubted.  It  is  an  established 
principle  of  law,  everywhere  recognized,  arising 
from  the  necessity  of  the  case,  that  the  disposi- 
tion of  immovable  property,  whether  by  deed, 
descent  or  any  other  mode,  is  exclusively  sub- 
ject to  the  government  within  whose  jurisdic- 
tion the  property  is  situated.  McCormick  v. 
SuUivmt,  10  Wheat.  202.  ..  .  Statutes  of 
Wills,  as.  is  justly  observed  by  the  Court  of  Ap- 
peals, are  enabling  acts,  and  prior  to  the  statute 
of  32  Henry  VIII  there  was  no  general  power 
at  common  law  to  devise  lands.  The  power  was 
opposed  to  the  feudal  policy  of  holding  lands  in- 
alienable without  the  consent  of  the  lord.  The 
English  Statute  of  Wills  became  a  part  of  the 
law  of  New  York  upon  the  adoption  of  her  con- 
stitution in  1777 ;  and,  with  some  modification  in 
its  language,  remains  so  at  this  day.  Every  per- 
son must,  therefore,  devise  his  lands  in  that 
State  witlain  the  limitations  of  the  statute  or  he 
cannot  devise  them  at  all.  His  power  is  bounded 
by  its  conditions.' 

It  is  apparent  that  the  mere  fact  of  classification 
is  not  sufficient  to  relieve  a  statute  from  the  reach  of 
the  equality  clause  of  the  Fourteenth  Amendment, 


12 

and  that  in  all  cases  it  must  appear  not  only  that  a 
classification  has,  been  made,  but  also  that  it  is  one 
based  upon  some  reasonable  ground — some  differ- 
ence which  bears  a  just  and  proper  relation  to  the  at- 
tempted classification  and  is  not  a  mere  arbitrary 
selection. 

Two  principles,  therefore,  must  be  reconciled  in 
the  Illinois  Inheritance  Law  if  it  is  to  be  sustained, 
the  equality  of  protection  of  the  laws  guaranteed 
by  the  Fourteenth  Amendment,  and  the  power  of  the 
State  to  classify  persons  and  property.  The  latter 
principle  needs  further  consideration.  What  test  is 
there  of  the  reasonableness  of  a  classification — of 
one  based  upon  ^  some  difference  which  bears  a  just 
and  proper  relation  to  the  attempted  classification — 
and  is  not  a  mere  arbitrary  selection?  Legislation, 
special  in  character  is.  not  forbidden  by  it,  as  we 
have  seen.  Treating  mechanics  as  a  class,  and  giv- 
ing them  a  lien  for  the  amount  of  their  work,  has 
been  held  reasonable.  Charging  a  railroad  corpora- 
tion and  not  other  corporations  or  persons  with  an 
attorney  ^s  fee  has  been  held  unreasonable,  yet  the 
former  would  seem  to  be  as  much  an  exclusive  favor 
as  the  latter  an  exclusive  burden. 

Of  taxation,  and  the  case  at  bar  is  of  taxation,  Mr. 
Justice  Bradley  said  in  the  BelVs  Gap  Railroad  v. 
Pennsylvania,  134  U.  S.  232,  and  Mr.  Chief  Justice 
Fuller  in  Giozza  v.  Tierman,  148  U.  S.  657,  that  the 
Fourteenth  Amendment  was  not  intended  to  compel 
the  State  to  adopt  an  iron  rule  of  equal  taxation. 
The  range  of  the  State's  power  was  expressed  by 
Mr.  Justice  Bradley  as  follows : 

'It  may,  if  it  chooses,  exempt  certain  classes 
of  property  from  any  taxation  at  all,  such  aa 
churches,  libraries  and  the  property  of  charita- 
ble institutions.  It  may  impose  different  specific 
taxes  upon  different  trades  and  professions,  and 
vary  the  rates  of  excise  upon  various  products ; 
it  may  tax  real  estate  and  personal  property  in 
a  different  manner ;  it  may  tax  visible  property 
only,  and  not  tax  securities  for  payment  of 
money;  it  may  allow  deductions  for  indebted- 


13 

ness  or  not  allow  them.    All  such  regulations, 
and  those  of  like  character,  so  long  as  they  pro- 
ceed within  reasonable  limits  and  general  usage, 
are  within  the  discretion  of  the  State  Legisla- 
ture, or  the  People  of  the  State  framing  their 
constitution  \ 
#     #     *     There  is,  therefore,  no  precise  applica- 
tion of  the  rule  of  reasonableness  of  classification, 
and  the  rule  of  equality  permits  many  practical  in- 
equalities.   And  necessarily  so.    In  a  classification 
for  governmental  purposes  there  cannot  be  an  exact 
exclusion  or  inclusion  of  persons  and  things.    Bear- 
ing these  considerations,  in  mind  we  can  solve  the 
questions  in  controversy. 

There  are  three  main  classes  in  the  Illinois  stat- 
ute, the  first  and  second  being  based,  respectively, 
on  lineal  and  collateral  relationship  to  the  testator 
or  intestate,  and  the  third  being  composed  of 
strangers,  to  his  blood  and  distant  relatives.  The 
latter  is  again  divided  into  four  subclasses  depend- 
ent upon  the  amount  of  the  estate  received.  The 
first  two  classes,  therefore,  depend  upon  substantial 
differences,  diiferences  which  may  distinguish  them 
from  each  other  and  them  or  either  of  them  from  the 
other  classes. — differences,  therefore,  which  ^bear  a 
just  and  proper  relation  to  the  attempted  classifica- 
tion'— the  rule  expressed  in  the  Gulfj  Colorado  & 
Santa  Fe  Railway  v.  Ellis,  165  U.  S.  150.  And  if  the 
constituents  of  each  class  are  affected  alike,  the  rule 
of  equality  prescribed  by  the  cases  is  satisfied.  In 
other  words,  the  law  operates,  ^equally  and  uni- 
formly upon  all  persons  in  similar  circumstances.' 
We  think  the  classification  of  the  Illinois  Law  was 
in  the  power  of  the  Legislature  to  make." 

11.     Amendment   1901 — Illinois. 

In  1901,  the  Act  of  1895  was  amended  to  extend  exemp- 
tions to  certain  educational,  religious,  charitable  and  be- 
nevolent bequests.,  and  also  included  a  section  (21J)  in- 
tended to  afford  a  remedy  to  quiet  the  question  of  taxa- 
bility, other  than  by  the  method  of  appraisement. 


14 

12.  Illinois  Law  in  Force  July  1  at,  1909. 

In  1909  the  Legislature  revised  the  Inheritance  Tax 
Law,  increasing  rates  and  adding  new  provisions.  Most 
of  the  provisions  of  the  Illinois  Law  of  1909  were  taken 
from  the  Transfer  Tax  Laws  of  New  York,  in  force  at 
that  time. 

13.  Scope  of  the  Law. 

The  State  is  interested  as  a  beneficiary  in  every  trans- 
fer of  property  by  death,  whether  the  transfer  is  effected 
by  will,  intestate  laws.,  or  by  deed,  grant,  gift  or  trans- 
fer in  the  lifetime  of  the  grantor  or  donor,  as  provided 
by  Section  1,  Laws  1909.  National  Safe  Deposit  Com- 
pany  v.  Stead,  250  111.  584. 

14.  State's  Interest. 

**The  State's  interest  is  a  vested  interest  equal  in  de- 
gree to  any  beneficiary  and  accrues  at  the  death  of  dece- 
dent."   Re  Graves,  242  111.  212-216. 

The  California  Court  in  estate  of  Stanford,  126  Cal. 
112,  described  the  State's  interest  as  follows: 

<<  #  *  *  The  Legislature  *  ♦  *  having  de- 
termined that  95%  of  decedent's  estate  may  go  to 
his  heirs,  and  beneficiaries,  and  that  5%  be  retained 
to  the  state,  it  is  too  clear  for  argument  that  this  5% 
vested  in  the  state  at  the  same  time  that  the  95% 
vested  in  the  heirs  or  other  beneficiaries ' '. 

15.  Right  to  Take  Property  Is  Regulated  by  the 

State. 

The  right  to  take  property  by  devise  or  descent  is  not 
a  natural  right,  but  is  a  creature  of  the  law.  The  Legis- 
lature can  provide  that  the  whole,  or  only  a  portion  of 
decedent's  property  shall  go  to  his  heirs  or  beneficiaries. 
The  Legislature  has.  provided  by  law  (Inheritance  Tax 


15 

Law  1895-1909)  that  the  State  shall  receive  a  portion  of  a 
decedent's  property.  Kochersperger  v.  Drake,  167  111. 
122 ;  Magoun  v.  III.  Trust  &  Savings  Bank,  170  U.  S.  283; 
Billings  v.  People,  189  111.  472;  Re  Graves,  242  111.  212; 
National  Safe  Deposit  Co,  v.  Stead,  250  111.  584. 

16.  Canstructioii'^In  Favor  of  the  Taxpayer. 

In  construing  special  laws  the  general  rule  is  to  favor 
the  citizen  as  against  the  State.  Matter  of  Enston,  113 
N.  Y.  174;  21  N.  E.  87;  3  L.  R.  A.  464;  Matter  of  Vassar, 
127  N.  Y.  1;  27  N.  E.  394;  Matter  of  Stewart,  131  N.  Y. 
274;  30  N.  E.  278;  Matter  of  Fayerweather,  143  N.  Y. 
114;  38  N.  E.  278;  Matter  of  Harbeck,  161  K  Y.  211;  55 
N.  E.  850. 

17.  Wlien  Against  the  Citizen. 

This  general  rule,  however,  is  not  applicable  to  per- 
sona or  corporations  claiming  exemption.  The  claimant 
must  show  wherein  the  statute  provides  the  exemption. 
Matter  of  Moore,  90  Hun  162;  35  N.  Y.  S.  782. 

18.  Tax — Controlled  by  Statnte  in  Force  at  Death 

of  Decedent. 

The  rights  of  parties  and  the  tax  itself  is  governed  by 
the  statute  in  force  at  the  time  of  that  death  which  effects 
the  transfer.    Matter  of  Sloane,  154  N.  Y.  109. 

19.  Intestate  Laws— Meaning;  of. 

**  There  are  no  laws  of  this  State  which  are  spe- 
cifically designated  as  intestate  laws^  and  we  are 
called  upon  to  determine  what  laws  or  system  of 
laws  were  referred  to  under  that  appellation  by  the 
act  in  question  (Illinois  Act,  1895).  The  same  term 
is  employed  in  similar  statutes  in  other  states  and 
we  have  no  doubt  the  laws  referred  to  are  those  laws 
of  the  state  which  govern  the  devolution  of  estates 


16 

of  persons  dying  intestate  and  include  all  applicable 
rules,  of  the  common  law  in  force  in  this  state.'' 
Billings  v.  The  People,  189  111.  472. 

20.  Succession — Is  Governed  by  the  La-w  of  Domi- 

cile. 

In  Russell  v.  Madden,  95  111.  485,  it  was  decided : 

**The  doctrine  is  that  the  succession  to  personal 
property  is  governed  by  the  law  of  the  actual  domi- 
cile of  the  intestate  at  the  time  of  his  death,  no  mat- 
ter what  was  the  country  of  his  birth,  or  his  former 
domicile  or  the  actual  situs  of  the  property  at  the 
time  of  his  death '  \ 

In  Young  v.  Wittenmyre,  123  111.  303,  the  Court,  citing 
Jenison  v.  Hapgood,  10  Pick.  77,  stated  the  rule  to  be 
that  the  lex  domicilii  and  not  lex  rei  sitae  must  govern 
in  the  distribution  of  the  personal  estate  of  a  deceased 
person  among  his  heirs  or  legatees,  whether  he  died  tes- 
tate or  intestate.    Also  see  re  Swift,  137  N.  Y.  77. 

21.  Succession— Governed  by  "La^xr  of  Domicile. 

Succession  is  governed  by  the  law  of  the  domicile  re- 
gardless of  the  tangible  location  of  personal  property. 
In  Frothingham  v.  Shaw,  175  Mass.  59,  the  Court  held  on 
this,  question,  as  follows : 

*^But  whatever  the  form  of  tax  is,  the  succession 
takes  place  and  is  governed  by  the  law  of  the  domi- 
cile;  and  if  the  actual  situs  is  in  a  foreign  country, 
the  courts  of  that  country  cannot  annul  the  succes- 
sion established  by  the  law  of  New  York  {Bammert 
V.  0 shorn,  141  N.  Y.  564).  In  further  illustration  of 
the  question,  of  the  extent  to  which  the  law  of  the 
domicile  operates,  it  is  to  be  noted  that  the  domicile 
is  regarded  as.  the  place  of  principal  administration 
and   any   other   administration   is   ancillary.     *     * 


17 

22.  Successian — Governed  by  Law  of  Domicile. 

The  property  of  a  resident  of  New  York,  located  with- 
out that  State  at  the  time  of  the  owner's  death,  adminis- 
tered and  distributed  within  that  State,  is  chargeable 
with  the  transfer  tax  under  Section  220,  L.  1896.  Mat- 
ter of  Dingnian,  66  App.  Div.  (N.  Y.)  228;  Matter  of 
Greene,  153  N.  Y.  223. 

23.  Succession — Cannot  be  Gkansed  by  Compro- 

mise among  Beneficiaries.     Money  Paid  in 
Compromise  not  a  Deduction 

Where  a  compromise  was  made  between  the  residuary 
legatees  and  a  disinherited  relative,  whereby  said  rela- 
tive, pursuant  to  an  agreement  with  the  residuary  lega- 
tees, received  from  the  executors,  the  sum  of  $50,000.00, 
in  consideration  of  refraining  from  contesting  the  val- 
idity of  the  will,  said  sum  of  $50,000.00  was  taxable  to 
the  residuary  legatees  and  devisees;  the  disinherited 
relative  did  not  succeed  to  said  sum  under  the  will,  but 
took  same  by  assignment  from  said  residuary  legatees 
and  devisees.  Said  sum  of  $50,000.00  is  not  a  legal  de- 
duction from  the  estate  of  decedent  to  be  subtracted  be- 
fore the  Inheritance  Tax  is  imposed.  Re  Graves,  242 
ni.  212;  Baxter  v.  Stevens,  95  N.  E.  854;  Re  Sanford's 
Estate,  133  N.  W.  870  (Neb.) 

24.  Compromise   of   "Will   Contest— Does   not  Af- 

fect Laiv  of  Succession. 

Frederick  Cook  died  testate,  February  17th,  1905,  a 
resident  of  the  State  of  New  York,  leaving  him  surviving 
a  widow  and  an  adopted  child.  By  the  38th  paragraph 
of  his  will,  the  residue  of  the  estate  was  given  to  various 
nephews  and  nieces.  When  the  will  was  offered  for  pro- 
bate the  widow  and  an  adopted  daughter  filed  objections 


18 

which  raised  an  issue  as  to  testamentary  ^.apacity. 
Pending  the  probate  a  compromise  was  arrived  at  which 
was  effected  by  certain  instruments  executed  by  the  widow 
and  each  of  the  residuary  legatees,  whereby,  for  a  good 
and  sufficient  consideration,  said  residuary  legatees  as- 
signed and  transferred  all  their  right,  title  and  interest 
in  and  to  the  residuary  estate  of  Frederick  Cook,  ac- 
cruing to  them  by  virtue  of  the  provisions  of  paragraph 
38  of  his  will,  to  the  widow.  Thereupon  objections  to  the 
probate  were  withdrawn  and  the  will  was  proved. 

In  an  Inheritance  Tax  appraisement  it  was  contended 
by  executors  that  the  widow  succeeded  to  the  residuary 
estate  and  that  the  nephews  and  nieces  did  not  succeed 
to  said  estate  and  that  the  latter  should  not  be  taxed  at 
a  5%  rate.  The  Court  held,  that  the  compromise  be- 
tween the  residuary  legatees  and  the  widow  affected  in 
no  wise  the  laws  of  succession  of  the  State  of  New  York; 
that  the  nephews  and  nieces,  as  residuary  legatees  re- 
ceived the  residuary  estate  under  paragraph  38  of  the 
will,  and  that  the  widow  took  said  property  by  assign- 
ment from  them.    Matter  of  Cook,  187  N.  Y.  253. 

25.     Curtesy — Does  not  Pass  by  "Will  or  Intestate 

Maria  E.  Green  died  intestate  a  resident  of  the  State 

of  New  York,  leaving  her  surviving  a  husband  and  no 

descendants.    It  was  urged  by  the  Comptroller  that  the 

husband  took  his  right  of  curtesy  by  the  intestate  laws 

of  the  State  of  New  York.    The  Court  held: 

**The  words  *  intestate  laws'  refer  to  statutes 
governing  descent  and  distribution  of  a  decedent's 
property.  That  statute  is  the  law's  will  for  the  dis- 
position of  property  when  its  owner  dies  without  a 
will.  Upon  inspection  to  discover  what  interest  it 
transfers,  it  is  found  that  it  does  not  transfer  an 


19 

estate  by  the  curtesy,  hut  disclaims  any  effect  upon 
such  an  estate.  That  is,  it  leaves  it  untouched  as  a 
matter  that  does  not  concern  it,  hence  the  taxing 
statute  does  not  include  iV\ 

In  short,  the  husband's  right  of  curtesy  does  not  pass 
by  intestate  laws,  and  therefore  is  not  taxable.  Greenes 
Estate,  129  N.  Y.  S.  54;  See  Matter  Starbuch,  137  App. 
Div.  (N.  Y.)  866. 

26.  General  Revenne  Laxr— -Decisions   under   not 

necessarily   in    Point    in    Inheritance    Tax 
Cases. 

The  taxable  transfer  law  has  no  reference  or  relation 
to  the  general  law  *  *  *  While  the  object  of  both 
is  to  raise  revenue  for  the  support  of  the  government 
they  have  nothing  else  in  common.  *  *  *  it  (trans- 
fer tax  law)  proceeds  upon  a  new  theory  of  the  right  of 
the  government  to  tax,  and  establishes  a  new  system  of 
taxation.  It  taxes  the  right  of  succession  to  property. 
All  property  having  an  appraisable  value  must  be  con- 
sidered whether  it  is  such  as  might  be  taxed  under  the 
general  law  or  not.  Many  kinds  of  property  might  be 
enumerated  which  are  not  assessable  under  the  general 
law  but  are  taxable  under  the  Inheritance  Tax  Law. 
Re  Knoedler,  140  N.  Y.  377;  People  v.  Grifp^th,  245  HI. 
532. 

27.  Transfer  Tax  Act  of  1892    (New  York)    not 

Retroactive. 

Eobert  A.  Forsyth  died  testate,  November  25,  1873, 
transferring  the  sum  of  $250,000.00  in  trust,  the  income 
therefrom  to  be  paid  to  his  widow  during  her  lifetime. 
At  the  death  of  the  widow  the  trustees  were  directed  to 
pay  from  said  fund  the  sum  of  $40,000.00  to  the  children 


20 

of  Isabelle  Little,  a  deceased  sister,  or  the  descendants 
of  such  sister  as  should  be  living  at  that  time.  Caroline 
W.  Forsyth,  widow  of  testator  died  October  26th,  1893, 
and  an  appraiser  was  appointed  to  assess  a  tax  upon  the 
succession  to  said  fund  of  $40,000.00  under  the  third 
subdivision,  Sec.  1,  ch.  399,  L.  1892,  which  reads  as  fol- 
lows: 

''Such  tax  shall  also  be  imposed  when  any  such 
person  or  corporation  becomes  beneficially  entitled 
in  possession  or  expectancy  to  any  property  or  the 
income  thereof  by  any  such  transfer,  whether  made 
before  or  after  the  passage  of  this  AoV\ 

The  Court  Held: 

''In  this  case  the  legatees  became  beneficially  en- 
titled to  their  rights  in  the  testator  *s  property  at 
his  death  in  the  year  1873.  At  the  time  of  that  event, 
the  transfer  by  the  will  of  their  beneficial  interest 
occurred  while  they  only  became  entitled  to  actual 
possession  of  the  property  at  the  death  of  the 
widow.  The  transfer  of  the  beneficial  interest  hav- 
ing occurred  before  the  passage  of  this  or  the  pre- 
vious acts  (Inhertance  Tax  Acts),  it  is  not  subject 
to  the  tax  under  the  act  (1892)  which  law  is  not  in- 
tended to  be  retroactive.  To  conclude  that  in  this 
case  the  act  was  intended  to  be  retroactive  would  be 
to  extend  its  effect  beyond  the  scope  of  the  remain- 
der and  principal  part  of  the  act,  which  is  not  a 
necessary  construction  and  is  improbable '\  Mat- 
ter of  Forsyth,  10  Misc.  Rep.  (N.  Y.)  477. 


28.     Remainders   Created  Prior  to  Tax  Laxir  Are 
not  Taxable  by  Subsequent  Enactment. 

Walden  Pell,  Sr.,  died  testate  a  resident  of  the  City 
of  New  York,  April  14th,  1863,  creating  by  will  a  life 
estate  in  all  his  property  to  his  widow  with  remainders 
over  at  her  death,  in  equal  shares,  to  his  nephews  and 
nieces  and  the  issue  of  any  deceased  nephew  and  niece. 


21 

together  with    one    equal    share   to    decedent's    sister, 

Emma.     The  widow  of  decedent  died  December  2(>th, 

1899,  at  which  time  all  the  estates  in  remainder  came 

into  actual  possession  and  enjoyment  of  the  beneficiaries 

under  the  will  and  codicil.     The  comptroller   of  New 

York  asked  for  a  tax  upon  the  successions  of  the  nephews 

and  nieces,  etc.,  which  came  into  actual  possession  by 

the  death  of  the  widow  under  Chap.  76,  Laws  1899,  which 

reads  as  follows: 

**A11  estates  upon  remainder  or  reversion,  which 
vested  prior  to  June  30,  1885,  but  which  will  not 
come  into  actual  possession  or  enjoyment  of  the 
person  or  corporation  beneficially  interested  therein 
until  after  the  passage  of  this  Act,  shall  be  ap- 
praised and  taxed  as  soon  as  the  person  or  corpora- 
tion beneficially  interested  therein  shall  be  entitled 
to  the  actual  possession  or  enjoyment  thereof. 

The  amendment  of  1899  became  a  law  March  14th,  of 
that  year  and  the  life  tenant  died  the  following  Decem- 
ber. It  was  conceded  that  the  remainders  were  con- 
trolled by  this  amendment  if  the  same  was  a  valid  ex- 
ercise of  legislative  power.  The  constitutionality  of  the 
law  was  not  affected  simply  because  it  was  retroactive 
but  for  the  reason  that  it  was  both  retroactive  and  im- 
paired vested  rights. 

The  Court  held: 

**The  legislation  of  1899,  now  under  considera- 
tion, obviously  preceeds  upon  a  misapprehension  of 
the  effect  of  the  absolute  vesting  of  a  remainder. 
Expectant  future  estates  as  defined  in  the  statute 
expressly  include  all  remainders,  whether  vested  or 
contingent,  and  they  are  by  statute  descendible,  de- 
visable and  alienable.  This  Court  and  the  Supreme 
Court  of  the  United  States  have  held  in  numerous) 
cases  that  the  transfer  tax  is  not  imposed  upon  the 
property  but  upon  the  right  of  succession.  It 
therefore  follows  that  where  there  was  a  complete 


22 

vesting  of  a  residuary  estate  before  the  enactment 
of  the  transfer  tax  statute,  it  cannot  be  reached  by 
that  form  of  taxation.  In  the  case  before  us  it  isi 
an  undisputed  fact  this  remainder  had  vested  in 
1863/'  Matter  of  Pell,  171  N.  Y.  48;  Matter  of  Pell, 
60  App.  Div.  (N.  Y.)  286,  reversed. 

29.     When  State  Supreme  Court  Final  on  Matters 
of  Taxation. 

Cleveland  Trust  Co,  v.  Lander,  184  U.  S.  111. 


23 


CHAPTER  II. 


Property  Within    the    State — Transfers    Taxable — 
Statutory  Exemptions — Bates  of   Tax. 


30.  Section   One,   Illinois   Law  of 

1895. 

31.  Section   One,    Illinois   Law  in 

force  July  1st,  1909. 

32.  Transfer  Defined. 

33.  Transfer — Eights  and  rates  de- 

termined as  of  death. 

34.  Transfer— Time  of. 

35.  Transfer — A  cceptance  of 

Transfer  is  necessary. 

36.  Transfer — When   a  widow  ac- 

cepts devise  in  lieu  of  dower. 

37.  Transfer — Bequest    to    pay    a 

debt. 

38.  Trustee's  fees  joined  with  an- 

nuity is  taxable  bequest. 

39.  Transfer — Must   be   something 

of  value.  Worthless  account. 

40.  When  the  Imposition  of  a  tax 

must  be  postponed  (Laws 
1895). 

41.  Eemainder  —  When  contingent 

cannot  be  presently  taxed. 

42.  Eemainder — Is    Vested    When 

(Laws  1895). 

43.  Eemainders — Tax    Payable    at 

Testator's  death. 

44.  Eemainders  —  Defeasible     es- 

tates not  taxable  until  in- 
defeasible. 

45.  Eemainders — Created  prior   to 

Tax  Legislation  are  not 
taxable. 

46.  Dower  and  Curtesy  not  Taxa- 

ble and  must  be  subtracted 
from  property  chargeable 
therewith. 

47.  Dower — Is  Taxable  in  Illinois 

under  Act  of  1895. 

48.  Award. 

49.  Ante-nuptial  contract  —  when 

taxable. 

50.  Ante-nuptial  c  o  n  t  r  a  c  t — not 

taxable. 

51.  Ante-nuptial  contract  to  make 

a  will — transfer  is  by  will 
and  taxable. 

52.  Advancements — Taxable  under 

Federal  Inheritance  Tax 
Law. 


53.  Community  Property — Califor- 

nia Statute  taxing  same 
does  not  impair  Obligation 
of  Contract. 

54.  Gifts  Inter  Vivos— When  Not 

Perfected. 

55.  Paragraph   One,    Section   One, 

Illinois  Law. 

56.  Equitable    Conversion  —  Gen- 

eral. 

57.  Equitable  Conversion  Not  Ap- 

plicable to  Subject  Property 
to  Taxation. 

58.  Personal     Property  —  Testa- 

mentary Direction  to  Con- 
vert Eeal  into  Personal 
Property. 

59.  Property  Physically  Situate  at 

Domicile  of  Owner. 

60.  Leasehold  Interest. 

61.  Domicile    Within    the    State — 

Chattels  Without  the  State. 

62.  Property    in    Foreign    State — 

Taxable  at  Domicile  of  De- 
cedent. 

63.  Personal  Property— Share  in  a 

Joint  Stock  Association 
Owning  Eeal  Estate. 

64.  Life    Insurance  —  Payable    to 

Legal  Eepresentatives  or 
Assigns. 

65.  United    States    Bonds — ^When 

Not  Taxable. 

66.  United     States    Bonds — When 

Taxable. 

67.  United     States    Bonds— When 

Taxable. 

68.  Paragraph   Two,  Section  One, 

Illinois  Law. 

69.  Non-residents'    Property    situ- 

ate in  New  York  Not  Tax- 
able Under  Act  of  1885. 

70.  Property    Within    the    State- 

When  Taxable. 

71.  Property   Within    the    State — 

Anc  i  1 1  a  r  y  Administration 
Cannot  be  Invoked  to  In- 
crease Tax.  Mortgage  De- 
ducted. 


24 


72.  Eeal    Estate — United    States       89. 

and  Other  Bonds — Cash  and 
Notes  Within  the  State. 

73.  Stocks  and  Bonds  of  Domestic 

Corporations  Taxable  in  Illi-        90. 
nois — Stocks   and   Bonds   of 
Foreign     Corporations     Not       91. 
Taxable  (L.  1895). 

74.  Stock    of    Domestic    Corpora-       92. 

tions— Owned    by    Non-resi- 
dent Decedent.  93. 

75.  Stock  and  Bonds  of  a  Domestic 

Corporation  —  Non-resident 
Owner — Held  as  Collateral.  94. 

76.  Stock — Certificates    and    Own- 

er 's    Eesidence    "Without 
Taxing  State.  95. 

77.  Stock Decedent  a  Non-res- 

ident and  Certificates  With-        96. 
out  the  Taxing  State. 

78.  Stock — Certificates    and    Own-        97. 

er's  Eesidence  Without  the 
Taxing  State — Taxable.  98. 

79.  Situs  of  Stock  for  Taxation. 

80.  Stock  of  New  Jersey  Corpora- 

tion —  Not    Taxable    When 
Owner  Dies  Non-resident.  99. 

81.  Stock — Certificates    and   Own- 

er 's    Eesidence    Without 
Taxing  State. 

82.  Stock — Decedent    a    Non-resi-      100. 

dent  —  Certificates    Without      loi. 
the  Taxing  State — Sole  Ad- 
ministration in  Foreign  Ju- 
risdiction and  Closed  Before 
Tax  Paid  in  New  York.  io2. 

83.  Stock— Issued  by  Corporation 

With      Property      in      Two 
States — Shares    Taxable    at 
Full  Value.    National  Bank      103. 
Stock. 

84.  Stock    of    Corporation    Organ- 

ized in  One  State — ^Property      104. 
of    Corporation    in    Several 
States. 

85.  Stock  of  a  Corporation  Organ-      io5. 

ized  in  Two  or  More  States 

— Taxable  on  Proportion  of     106. 

Property. 

86.  Mileage  is  a  Basis  to  Deter- 

mine    Proportion  —  But     Is      ^^^ 
Not  the  Only  Basis. 

87.  Stock     of     Corporation     with      l^^- 

Property    in    two    or    more 
States — Proportion  Taxable. 

88.  Stock  —  Non-resident  —  Pro- 

portionate  Value   Taxable.    J  109. 


Stock  —  Non-resident  Owner- 
ship Eequires  Ancillary  Ad- 
ministration in  Taxing 
State. 

Stock  of  National  Banks — 
Taxable. 

Stock  of  Foreign  Corporations 
— Not  Taxable. 

Stock  of  Foreign  Corporation 
— Not  Taxable. 

Bonds  of  Foreign  Corporation 
and  Stock  of  National  Bank 
Within  the   State. 

Bonds  of  Foreign  and  Domes- 
tic Corporations — Stock  of 
Domestic    Corporation. 

United  States  Bonds— Stock 
of  Foreign  Corporations. 

Bonds — ^Foreign — When  Taxa- 
ble. 

United  States  Bonds — ^When 
Not  Taxable. 

Bonds  and  Stock  of  Domestic 
Corporations  Owned  by  Non- 
resident and  Situate  With- 
out the  State. 

Bonds  Held  out  of  New  York 
secured  by  mortgage  on 
land  in  New  York — Not 
Taxable. 

Notes  Secured  by  Mortgage. 

Notes — ^When  Situate  at  Dom- 
icile of  Non-resident  of 
Massachusetts,  but  secured 
by  Eeal  Estate  Therein. 

Property  Taxable  in  Two 
States — Money  Deposited  in 
New  York — Depositor  Eesi- 
dent  of  Illinois. 

Money — D  epositedin  New 
York  State  for  Nearly  Two 
Months — Taxable. 

Money  of  Non-resident  Dece- 
dent on  Deposit  in  New 
York — Trust  Account. 

Notes  Secured  by  Mortgage 
Taxable  in  Michigan. 

Notes  Secured  by  Mortgage  on 
Lands  in  Michigan  Subject 
to  Taxation. 

Land  Contracts. 

Non-resident — Capital  Invest- 
ed in  Business  in  New  York 
— Stock  Exchange  Member- 
ship Taxable. 

Partnership  Property. 


25 


110.  Partnership— Assets    in    New 

York  and  Illinois. 

111.  Non-resident     Decedent     Pos- 

sessed of  Legacy  in  New 
York  Estate. 

112.  Share  of  Eesident  Decedent  in 

Undistributed  Foreign  As- 
sets. 

113.  Deceased     Non-resident  ^s     In- 

terest in  Eesident  Dece- 
dent's Estate. 

114.  Non-resident  Decedent  a  Ben- 

eficiary in  Unliquidated  As- 
sets Within  the  State. 

115.  Credits     of     Non-resident     in 

Taxing  State— When  Taxa- 
ble. 

116.  Tax    Paid    to    United    States 

Under  Federal  Inheritance 
Tax  Law  and  Tax  Paid  to 
the  State  of  Montana  Does 
Not  Affect  Taxation  in  the 
State  of  New  York. 

117.  Non-resident — When    Property 

in  Taxing  State  is  Equalled 
by  Indebtedness. 

118.  Insurance — Domestic  Policy  on 

Life  of  Non-resident  not 
taxable. 

119.  Insurance — Domestic     Policies 

on  Life  of  Nonresident  Not 
Taxable. 

120.  Contract  for  Sale  of  Land  in 

Nebraska — Owner  a  Eesi- 
dent of  New  York. 

121.  Nonresident   Estate — Distribu- 

tion by  Executors  Cannot 
Avoid  Taxation. 

122.  Nonresident  Estate — Distribu- 

tion by  Administrator  Can- 
not Avoid  Taxation— Proj- 
portion  of  Indebtedness  De- 
ductible. 

123.  Distribution    of    Property    of 

Nonresident  Cannot  Eeduce 
Tax.  Pro  Eata  Distribu- 
tion. 

124.  Nonresidents  —  Property     in 

Taxing  State  Pro  Eated  for 
Taxation.  Executors  Can- 
not Distribute  so  as  to  Ee- 
duce Tax. 

125.  Paragraph  Three,  Section  One, 

Illinois  Law. 

126.  Transfer  in  Contemplation  of 

Death. 


127.  Transfer  in  Contemplation  of 

Death. 

128.  Transfer  in  Contemplation   of 

Death — Act  Imposing  Tax 
Constitutional. 

129.  Transfer— When    Not   in   Con- 

templation of  Death. 

130.  Transfer  to  Take  Effect  after 

Death — a  Writing  Not  Nec- 
essary to  Evidence  Eeten- 
tion  of  Income. 

131.  Transfer  to  Take  Effect  after 

Death— When    Taxable. 

132.  Transfer     Prior     to     Death — 

When   Taxable. 

134.  Transfer— To   Take    Effect   at 

or  After  Death. 

135.  Transfer— To    Take   Effect    at 

or   after  Death. 

136.  Transfer     to    take     effect    at 

Death. 

137.  Transfer — Intended    to     Take 

Effect  at  Death  of  Donor. 

138.  Transfer  Prior  to  Death — ^Ee- 

servation  of  Income  by  oral 
Arrangement. 

139.  Transfer     Prior     to     Death — 

When  Taxable. 

140.  Cases  in  Which  Transfers  were 

Held  Not  Taxable. 

141.  Transfer— Intention  to  Defeat 

the  Tax. 

142.  Transfer — Taxation  is  Imposed 

at  Time  of  Death  of  the 
Grantor. 

143.  Transfer  by  Deed  Prior  to  In- 

heritance Tax  Law — ^When 
Taxable. 

144.  Other  cases  wherein  the  ques- 

tion of  tax  is  raised  on 
transfers  prior  to  death. 

145.  Paragraph  Four,  Section  One, 

Illinois  Law. 

146.  Power  of  Appointment — ^When 

Created  by  will  of  decedent 
who  died  prior  to  tax  legis- 
lation— real  estate  converted 
into  Personalty  before 
Transfer. 

147.  Power      of      Appointment  — 

Transfer  is  Effected  by  Ex- 
ercise of  Power. 

148.  Power  of  Appointment  Created 

by  will  of  Testator  who  died 
prior  to  tax  Legislation. 


26 


149.  Tax  on  Transfer  Effected  by 

Power  Created  under  will 
before  tax  Legislation  Con- 
stitutional. 

150.  Power  of  Appointment — ^When 

Situs  of  Property  Immater- 
ial. 

151.  Tax  on  Transfer  Effected  by 

Exercise  of  a  Power  created 
Prior  to  Tax  Legislation 
Constitutional. 

152.  Power  of  Appointment — When 

Erroneous  Prior  Assignment 
Does  Not  Preclude  Tax  on 
Transfer  by  the  Exercise  of 
the  Power. 

153.  Power    of   Appointment — Eeal 

Estate  in  New  York  Ap- 
pointment by  Nonresident 
Donee  Taxable. 

154.  Donee  and  Appointee  Nonresi- 

dent— Property  within  the 
State. 

155.  Mortgages  held  Outside  State 

Transfer  by  Nonresident  un- 
der Testamentary  Power 
Created  by  will  of  deceased 
resident  of  New  York. 

156.  Power  of  Appointment — When 

Not  Exercised. 

157.  When  Appointee  Takes  under 

will  creating  Power  and  not 
by  exercise  of  power. 

158.  When   Exercise    of    Power   is 

Mere  Form  Beneficiary 
Takes  by  Will  Creating 
Power. 

159.  When     Appointee     Elects     to 

Take  by  Will  instead  of 
Power. 

160.  Value  of  Property  Not  Dimin- 

ished by  Life  Estate  Pre- 
viously Taxed. 

161.  Eelationship  of  Donee  of  Pow- 

er to  Appointee  Determines 
Eate  of  Tax. 

162.  Eate  of  Taxation  Governed  by 

Law  in  Force  at  the  Time 
of  the  Exercise  of  the  Pow- 
er. 

163.  Exceptions  —  Eelationship  — 

Eates  of  Tax  —  When  Tax 
Acrues — All  Questions  De- 
termined as  of  Date  of 
Transfer. 
142.  Tax  Accrues  at  Death  of  De- 
cedent. 


165.  Beneficial  Interest  —  Transfer 

Must  Be  Effected  While  Tax 
Law  is  in  Force. 

166.  Eate    of   Tax   Determined   by 

Eelationship. 

167.  Exemption. 

168.  Exemption — Statutory  Exemp- 

tion Eelates  to  the  Share  of 
Beneficiary. 

169.  Exemptions  —  Claimant  Must 

Show  Exemption. 

170.  Exemptions — not  favored. 

171.  Lineal  Descendants  —  Children 

of  Adopted  Child. 

172.  Particular   Eates   of  Taxation 

and  Exemptions  under  the 
Illinois  Law  in  Force  July 
1st,  1895. 

173.  Transfers    Under    the    Illinois 

Law  Effected  Prior  to  July 
1st,  1909 — Eates  and  Eights 
of  the  Parties. 

174.  Illinois  Law  in  force  July  1st, 

1909  —  Eates  and  Exemp- 
tions. 

175.  Husband   of   a  Daughter  who 

died  before  Testator. 

176.  When    Husband    of    Deceased 

Daughter  is  remarried. 

177.  Widow     of     Adopted     son     is 

^* Widow  of  a  Son.'' 

178.  Adoption — When    Effected    in 

Foreign  State  Entitles  Bene- 
ficiary to  Exemption. 

179.  Children  of  an  Adopted  Child 

are  *^ Lineal"  Descendants 
of  decedent. 

180.  Child  of  Adopted  child— When 

Taxable. 

181.  Eelation   of  Parent  to  Benefi- 

ciary —  Must  be  Clearly 
Shown. 

182.  Acknowledged  Eelation  of  Par- 

ent. 

183.  Parent  and  Child  —  Mutually 

Acknowledged  Eelation. 

184.  Children    of   Parent    to    whom 

Decedent  stood  in  Eelation 
of  Parent  —  Stranger  in 
Blood. 

185.  Children    of   Person    to    whom 

Decedent  Stood  in  Eelation 
of  Parent  are  Taxable. 

186.  Act  of  1909    (Illinois)    Limits 

Exemption. 

187.  Both  Parents  must  be  dead — 

Stepchild  a  stranger. 


27 


188.  Grandmother    not    a    *' Lineal 

Decendanf  —  Taxable  as 
Stranger. 

189.  Second    Class    Beneficiaries — 

Uncle,  Aunt,  Niece  or 
Nephew,  or  any  Lineal  De- 
scendant of  the  same. 


190.  Contra. 

191.  Third     Class  —  Strangers    in 

Blood,  etc. 

192.  Exemptions  —  $500  a  Limita- 

tion, not  an  Exemption. 

193.  Exemptions  —  $500  a  Limita- 

tion. 


30.     Section  1.     Inlieritance  Tax  Law  of  Illinois, 
in  Force  July  1st,  1895. 

Section  1.  All  property,  real,  personal  and 
mixed  shall  pass  by  will  or  by  the  intestate  laws  of 
this  State  from  any  person  who  may  die  seized  or 
possessed  of  the  same  while  a  resident  of  this  State 
or,  if  decedent  was  not  a  resident  of  this  State  at 
the  time  of  his  death,  which  property  or  any  part 
thereof  shall  be  within  this  State  or  any  interest 
therein  or  income  therefrom,  which  shall  be  trans- 
ferred by  deed,  grant,  sale  or  gift  made  in  contem- 
plation of  the  death  of  the  grantor  or  bargainor  or 
intended  to  take  effect,  in  possession  or  enjoyment 
after  such  death,  to  any  person  or  persons  or  to  any 
body  politic  or  corporate  in  trust  or  otherwise,  or 
by  reason  whereof  any  person  or  body  politic  or 
corporate  shall  become  beneficially  entitled  in  pos- 
session or  expectation  to  any  property  or  income 
thereof,  shall  be,  and  is,  subject  to  a  tax  at  the  rate 
hereinafter  specified  to  be  paid  to  the  treasurer  of 
the  proper  county  for  the  use  of  the  State,  and  all 
heirs,  legatees,  devisees,  administrators,  executors 
and  trustees  shall  be  liable  for  any  and  all  such 
taxes  until  the  same  shall  have  been  paid  as  herein- 
after directed.  When  the  beneficial  interests  to  any 
property  or  income  therefrom  shall  pass  to  or  for 
the  use  of  any  father,  mother,  husband,  wife,  child, 
brother,  sister,  wife  or  widow  of  the  son  or  the  hus- 
band of  the  daughter,  or  any  child  or  children 
adopted  as  such  in  conformity  with  the  laws  of  the 
State  of  Illinois,  or  to  any  person  to  whom  the  de- 
ceased, for  not  less  than  ten  years  prior  to  death, 
stood  in  the  acknowledged  relation  of  a  parent,  or 
to  any  lineal  descendant  born  in  lawful  wedlock,  in 
every  such  case,  the  rate  of  tax  shall  be  one  dollar 


28 

on  every  hundred  dollars  of  the  clear  market  value 
of  such  property  received  by  each  person  and  at  and 
after  the  same  rate  for  every  less  amount,  provided 
that  any  estate  which  may  be  valued  at  a  less  sum 
than  twenty  thousand  dollars  shall  not  be  subject  to 
any  such  duty  or  taxes,  and  the  tax  is  to  be  levied 
in  above  cases  only  upon  the  excess  of  twenty  thou- 
sand dollars  received  by  each  person.  When  the 
beneficial  interests  to  any  property  or  income  there- 
from shall  pass  to  or  for  the  use  of  any  uncle,  aunt, 
niece,  nephew  or  any  lineal  descendant  of  the  same, 
in  every  such  case  the  rate  of  such  tax  shall  be  two 
dollars  on  every  one  hundred  dollars  of  the  clear 
market  value  of  such  property  received  by  each  per- 
son on  the  excess  of  two  thousand  dollars  so  re- 
ceived by  each  person.  In  all  other  cases  the  rate 
shall  be  as  follows:  On  each  and  every  hundred 
dollars  of  the  clear  market  value  of  all  property 
and  at  the  same  rate  for  any  less  amount;  on  all 
estates  of  ten  thousand  dollars  and  less,  three  dol- 
lars; on  all  estates  of  over  ten  thousand  dollars  and 
not  exceeding  twenty  thousand  dollars,  four  dollars ; 
on  all  estates  over  twenty  thousand  dollars  and  not 
exceeding  fifty  thousand  dollars,  five  dollars,  and  on 
all  estates  over  fifty  thousand  dollars,  six  dollars: 
Provided,  that  an  estate  in  the  above  case  which 
may  be  valued  at  a  less  sum  than  five  hundred  dol- 
lars shall  not  be  subject  to  any  duty  or  tax. 

A  revision  and  enlargement  of  this  and  other  sections 
of  the  law  of  1895  as  amended  in  1901  was  effected  by  the 
Act  to  Tax  Gifts,  Legacies,  Inheritances,  Transfers,  etc., 
in  force  July  1st,  1909,  whereby  the  foregoing  section 
was  superseded  by  the  following: 

31.  AN  ACT  to  Tax  Gifts,  Legacies,  Inlieritances, 
Transfers,  Appointments  and  Interests  in 
Certain  Cases,  and  to  Provide  for  tlie  Col- 
lection of  the  Same,  and  Repealing  Certain 
Acts  Therein  Named. 

Section   1.     In   force   July   1st,    1909.     A   tax 
shall  be    and  is  hereby  imposed  upon   the  trans- 


29 

fer  of  any  property,  real,  personal  or  mixed, 
or  of  any  interest  therein  or  income  therefrom, 
in  trust  or  otherwise,  to  persons,  institutions  or 
corporations,  not  hereinafter  exempted,  in  the  fol- 
lowing cases : 

1.  When  the  transfer  is  by  will  or  by  the  intestate 
laws  of  this  State,  from  any  person  dying,  seized  or 
possessed  of  the  property  while  a  resident  of  the 
State. 

2.  When  the  transfer  is  by  will  or  intestate  laws 
of  property  within  the  State  and  the  decedent  was  a 
non-resident  of  the  State  at  the  time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a 
resident,  or  by  a  non-resident  when  such  non-resi- 
dent's property  is  within  this  State,  by  deed,  grant, 
bargain,  sale  or  gift,  made  in  contemplation  of  the 
death  of  the  grantor,  vendor  or  donor,  or  intended 
to  take  effect  m  possesion  or  enjoyment  at  or  after 
such  death.  When  any  such  person,  institution  or 
corporation  becomes  beneficially  entitled  in  posses- 
sion or  expectancy  to  any  property  or  the  income 
therefrom,  by  any  such  transfer,  whether  made  be- 
fore or  after  the  passage  of  this  Act. 

4.  Whenever  any  person,  institution  or  corpora- 
tion shall  exercise  a  power  of  appointment  derived 
from  any  disposition  of  property  made  either  before 
or  after  the  passage  of  this  Act,  such  appointment, 
when  made,  shall  be  deemed  a  taxable  transfer  un- 
der the  provisions  of  this  Act,  in  the  same  manner 
as  though  the  property  to  which  such  appointment 
relates  belonged  absolutely  to  the  donee  of  such 
power  and  had  been  bequeathed  or  devised  by  such 
donee  by  will ;  and  whenever  any  person  or  corpora- 
tion possessing  such  a  power  of  appointment  so 
derived  shall  omit  or  fail  to  exercise  the  same  with- 
in the  time  provided  therefor,  in  whole  or  in  part,  a 
transfer  taxable  under  the  provisions  of  this  Act 
shall  be  deemed  to  take  place  to  the  extent  of  such 
omission  or  failure,  in  the  same  manner  as  though 
the  persons  or  corporations  thereby  becoming  en- 
titled to  the  possession  or  enjoyment  of  the  prop- 
erty to  which  such  power  related  had  succeeded 
thereto  by  a  will  of  the  donee  of  the  power  failing 


30 

to  exercise  such  power,  taking  effect  at  the  time  of 
such  omission  or  failure. 

When  the  beneficial  interests  to  any  property  or 
income  therefrom  shall  pass  to  or  for  the  use  of  any 
father,  mother,  husband,  wife,  child,  brother,  sister, 
wife  or  widow  of  the  son,  or  the  husband  of  the 
daughter,  or  any  child  or  children  adopted  as  such 
in  conformity  with  the  laws  of  the  State  of  Illinois, 
or  to  any  person  to  whom  the  deceased,  for  not  less 
than  ten  years  prior  to  death,  stood  in  the  acknowl- 
edged relation  of  a  parent:  Provided ^  however y 
such  relationship  began  at  or  before  said  person's 
fifteenth  birthday  and  was  continuous  for  said  ten 
years  thereafter :  And,  provided,  also,  that  the  par- 
ents of  such  person  so  standing  in  such  relation 
shall  be  deceased  when  such  relationship  com- 
menced, or  to  any  lineal  descendant  of  such  dece- 
dent born  in  lawful  wedlock.  In  every  such  case  the 
rate  of  tax  shall  be  two  dollars  on  every  one  hun- 
dred dollars  of  the  clear  market  value  of  such  prop- 
erty received  by  each  person,  when  the  amount  so 
received  exceeds  in  amount  the  sum  of  one  hundred 
thousand  dollars,  and  one  dollar  on  each  one  hun- 
dred dollars  of  the  clear  market  value  of  such  prop- 
erty received  by  each  person  when  the  amount  so 
received  is  one  hundred  thousand  dollars  or  less; 
and  at  and  after  the  same  rates,  respectively,  for 
every  less  amount :  Provided,  that  any  gift,  legacy, 
inheritance,  transfer,  appointment  or  interest  which 
may  be  valued  at  a  less  sum  than  twenty  thousand 
dollars  shall  not  be  subject  to  any  such  duty  or 
taxes,  and  the  tax  is  to  be  levied  in  the  above  cases 
only  upon  the  excess  of  twenty  thousand  dollars  re- 
ceived by  each  person.  When  the  beneficial  interest 
to  any  property  or  income  therefrom  shall  pa^s  to 
or  for  the  use  of  any  uncle,  aunt,  niece  or  nephew  or 
any  lineal  descendant  of  the  same,  in  any  such  case 
the  rate  of  such  tax  shall  be  four  dollars  on  every 
one  hundred  dollars  of  the  clear  market  value  of 
such  property  received  by  each  person  on  the  excess 
of  two  thousand  dollars  so  received  by  each  person 
when  the  amount  so  received  exceeds  the  sum  of 
twenty  thousand  dollars;  and  two  dollars  on  every 


31 

one  hundred  dollars  of  the  clear  market  value  of  such 
property  received  by  each  person  on  the  excess  of 
two  thousand  dollars  so  received  by  each  person  when 
the  amount  so  received  is  twenty  thousand  dollars  or 
less.  In  all  other  cases  the  rate  shall  be  as  follows : 
On  each  and  every  one  hundred  dollars  of  the  clear 
market  value  of  all  property  and  at  the  same  rate 
for  any  less  amount;  on  all  transfers  of  ten  thou- 
sand dollars  and  less,  three  dollars ;  on  all  transfers 
over  ten  thousand  dollars  and  not  exceeding  twenty 
thousand  dollars,  four  dollars ;  on  all  transfers  over 
twenty  thousand  dollars  and  not  exceeding  fifty 
thousand  dollars,  ^ve  dollars;  on  all  transfers  over 
fifty  thousand  dollars  and  not  exceeding  one  hun- 
dred thousand  dollars,  six,  dollars ;  and  on  all  trans- 
fers over  one  hundred  thousand  dollars,  ten  dollars : 
Provided,  that  any  gift,  legacy,  inheritance,  trans- 
fer, appointment  or  interest  which  may  be  valued  at 
a  less  sum  than  five  hundred  dollars  shall  not  be 
subject  to  any  duty  or  tax. 

32.  Transfer—Defined. 

In  defining  the  meaning  of  the  word  *' transfer"  un- 
der the  Inheritance  Tax  Laws  of  New  York  1892  Ch. 
399,  the  Court  said: 

**It  is  certainly  within  the  constitutional  power 
of  the  Legislature  to  tax  all  property  transferred 
by  will,  whether  the  motive  of  the  testator  be  to 
make  a  gift  or  to  pay  a  debt,  and  the  language, 
absolutely  unambiguous  and  free  from  saving 
clauses,  which  the  Legislature  employs,  affords  the 
best  indication  that  the  word  *  transfer'  in  the  stat- 
ute is  used  advisedly  and  according  to  its  ordinary 
legal  signification,  which  is,  that  the  owner  of  a  thing 
delivers  it  to  another  with  the  intent  of  passing  the 
rights  which  he  has  in  it  to  the  latter. ''  Matter  of 
Gould,  156  N.  Y.  423. 

33.  Transfer — Rights  and  Rates  Determined  as  of 

Death. 

All  rights  and  interests  comprehended  by  the  Inherit- 


32 

ance  Tax  Law  are  to  be  determined  as  of  the  time  of 
that  death  which  effects  the  transfer. 

Ayers  v.  Title  db  Trust  Co.,  147  111.  42. 

Matter  of  Graves,  242  111.  212. 

National  Safe  Deposit  Co,  v.  Stead,  250  HI.  584. 

Billings  v.  People,  189  111.  472. 

Matter  of  BucUngham,  106  App.  Div.  (N.  Y.)  IS". 

McCurdy  v.  McCurdy,  83  N.  E.  (Mass.)  881. 

Re  Howe,  86  App.  Div.  (N.  Y.) 

34.  Transfer— -Time  of. 

The  date  of  the  death  of  the  decedent  fixes  the  time 
when  the  transfer  of  title  to  a  remainder  is  effected. 
The  fact  that  uncertainty  exists  as  to  the  person  who 
will  take  snch  remainder  is  immaterial.  Matter  of 
Sloane,  154  N.  Y.  109. 

35.  Transfer — Acceptance   of   Transfer   is  Neces- 

sary. 

The  motive  of  the  transfer  is  not  material.  If  the 
object  of  the  bequest  is  to  pay  a  debt,  discharge  a  moral 
obligation,  or  benefit  some  relative  for  whom  the  tes- 
tator entertains  a  strong  affection,  the  transfer  is 
effected  by  will,  if  the  bequest  is  accepted  and  the  State 
is  entitled  to  a  tax.    Matter  of  Gould,  156  N.  Y.  423. 

36.  Transfer — When  a  Widoixr  Accepts  Devise  in 

liieu  of  Doiver. 

By  the  will  of  Stuyvesant,  his  widow  was  bequeathed 
certain  property  in  lieu  of  dower.  She  failed  to  re- 
nounce the  will  which  provided  for  a  devise  to  her  of 
one-third  of  the  residue.  It  was  contended  that  she  was 
entitled  to  dower,  in  addition  to  the  testamentary  pro- 
vision.    The  Court  held  that   the   direction   as   to    the 


33 

residuary  estate  was  inconsistent  with  any  intention  on 
the  part  of  the  testator  that  the  widow  should  receive 
dower  in  addition  to  the  testamentary  provision.  That 
inasmuch  as  the  widow  accepted  this  property  under  the 
will  she  was  taxable  on  said  transfer  by  the  will.  Al- 
though it  is  the  law  of  New  York  that  dower  is  not  tax- 
able, on  the  ground  that  there  is  no  transfer  by  will  or 
intestate  laws,  yet  if  the  party  entitled  to  dower  fails  to 
elect  and  take  her  share  of  an  estate  as  dower,  but  does 
in  fact,  take  the  property  by  will,  such  property  is  trans- 
mitted to  her  by  the  testamentary  instrument  and  effects 
a  taxable  transfer.  Re  Stuyvesant's  Estate,  131  N.  Y. 
S.  197. 

37.  Transfer— Bequest  to  Pay  a  Debt. 

In  a  codicil  to  the  last  will  of  Gould,  appears  the  fol- 
lowing : 

^*My  beloved  son,  having  developed  a  remarkable 
business  ability  and  having  for  twelve  years  de- 
voted himself  entirely  to  my  business,  and  during 
the  past  five  years  taken  entire  charge  of  all  of  the 
difficult  interests,  I  hereby  fix  the  value  of  said 
services  at  $5,000,000.00,  payable  as  follows,  *•*»', 

specifying  a  sum  in  cash  and  the  balance  in  securities. 
In  an  appraisement  for  taxation  under  the  New  York 
Transfer  Act  of  1892  it  was  held  that  the  testator  in- 
tended to  discharge  an  agreed  debt  to  his  son.  The  son 
accepted  the  said  sum  for  his  services  under  the  codicil, 
and  such  acceptance  constituted  a  transfer  taxable  under 
the  law  of  1892.    Matter  of  Gould,  156  N.  Y.  423. 

38.  Trustee's  Fees  Joined  with  Annuity  is  Taxa- 

ble Bequest. 

The  will  of  Otto  Huber  contained  the  following  pro- 
vision : 

*'I  further  direct  that  mv  executor  and  trustee  be 


34 

paid  from  my  estate  the  sum  of  Fifteen  Hundred 
Dollars  annually,  together  with  the  commissions  al- 
lowed by  law,  as  long  as  he  shall  act  as  such  ex- 
ecutor and  trustee,  the  same  to  be  received  by  him 
in  full  compensation  for  any  and  all  services  legal 
or  otherwise,  which  he  shall  render  my  estate." 

Held,  that  an  acceptance  of  such  provision  was  an  an- 
nuity subject  to  the  inheritance  tax  under  Section  227  of 
the  Transfer  Tax  Law  of  1896,  Chap.  908.  Matter  of 
Evher,  80  App.  Div.  (N.  Y.)  458. 

39.  Transfer^ — Must    be     Sometliing     of     Valne— 

Worthless  Account. 

Decedent  bequeathed  his  estate  to  his  four  children 
and  widow.  The  appraiser  fixed  the  net  value  of  the 
estate  at  $244,000.00.  On  appeal  to  surrogate  by  ex- 
ecutor, the  taxing  order  was  modified  by  deducting  from 
the  above  amount,  an  item  of  $17,000.00  which  appeared 
as  an  open  account  upon  the  books  of  the  deceased 
against  his  son  G.  Warren  Manning,  one  of  the  legatees, 
and  who  was  insolvent. 

The  question  arises  whether  this  worthless  account  is 
to  be  deemed  property  transferred  by  will,  within  the 
meaning  of  the  statute.  The  bequest  to  the  son  under 
the  will  was  more  than  sufficient  to  pay  it. 

Held,  that  the  item  of  $17,000.00  does  not  represent 
property  within  a  fair  meaning  of  the  statute.  The  tax 
is  imposed  on  the  shares  taken  by  the  beneficiary.  This 
item  would  not  add  any  property  of  value  to  the  estate, 
and  is  not  subject  to  tax.  Affirming  59  App.  Div.  (N.  Y.) 
624.    Matter  of  Manning,  169  N.  Y.  449. 

40.  When  the  Imposition  of  a  Tax  Must  be  Post- 

poned (Laws  1895). 

When  a  beneficiary  taking  an  interest  in  remainder 


35 

cannot  be  identified,  or  when  the  property  limited  can- 
not be  measured  or  determined,  the  tax  must  be  post- 
poned until  the  beneficiary  becomes  known  or  the  prop- 
erty determinable.  People  v.  McCormich,  208  111.  437. 
Also  see  Re  Cooper,  127  Pa.  435;  Re  Roosevelt,  143  N.  Y. 
120;  Re  Hoffman,  143  N.  Y.  334;  Re  Nieman,  131  Pa. 
346. 

41.  Remainder — When     Contingent     Cannot     be 

Presently  Taxed 

People  V.  McCormick,  (supra) ;  Billings  v.  People,  189 
111.  472. 

42.  Remainders — Are  Vested  "When  (Laws  1895). 

Eemainders  limited  to  persons  to  be  determined  by 
the  laws  of  descent,  or  when  limited  to  a  class  are  con- 
sidered as  vested.  Ayers  v.  Chicago  Title  and  Trust 
Company,  187  111.  42. 

43.  Remainder^ — Tax  Payable  at  Testator's  Death. 

The  tax  on  a  remainder,  whether  vested  or  contingent, 
is  dne  and  payable  at  the  time  of  the  death  of  testator. 
Section  2  gives  the  remainderman  the  right  to  defer  pay- 
ment by  giving  a  bond  to  secure  the  tax.  Ayers  v.  Chi- 
cago Title  and  Trust  Company,  187  HI.  42  (Eeviewed 
ID  People  V.  McCormick,  208  111.  437). 

44.  Remainders — Defeasible  Estates  not  Taxable 

Until  Indefeasible. 

Clarissa  E.  Curtis  died  a  resident  of  New  York  State 
while  the  Act  of  1885  was  operative.  An  appraiser  was 
appointed  under  the  collateral  inheritance  tax  act  of 
1885  and  by  said  appraiser 's  report,  contingent  interests 
were  taxed.     The  will  of  decedent  created  a  group  of 


36 

trusts  for  the  benefit  of  two  daughters  and  two  named 
grandchildren,  each  trust  running  for  the  life  of  the 
beneficiary  with  remainders  over  to  such  of  the  nephews 
and  nieces  of  decedent  as  should  be  living  at  the  time 
of  the  termination  of  the  respective  life  estates,  or,  if 
such  nephews  and  nieces  did  not  survive,  to  their  then 
living  issue. 

On  an  objection  interposed  to  the  immediate  taxation 

of  these  remainders  the  Court  of  Appeals  held: 

**That  the  estates  limited  to  the  nephews  and 
nieces  were  contingent;  that  it  never  was  intended 
by  the  law  to  tax  a  theory  having  no  real  substance 
behind  it.  As  was  said  in  Matter  of  Swift,  137  N.  Y. 
86,  the  question  of  taxation  is  one  of  fact  and  can- 
not rest  on  theories  or  fictions.'' 

Decided  that  contingent  estates  were  not  presently 
taxable  under  the  law  of  1885.  Matter  of  Curtis,  142 
N.  Y.  219. 

45.     Remainders — Created    Prior  to  Tax    Legisla- 
tion  Are  not  Taxable. 

John  B.  Seaman  died  testate  in  October,  1876.  His 
will  bequeathed  a  residue  in  these  words : 

*^ Sixth:  All  the  rest,  residue  and  remainder  of 
my  estate,  real  and  personal,  I  give,  devise  and  be- 
queath to  my  executors,  hereinafter  named,  in  trust 
to  apply  and  pay  over  the  income  of  one  equal  un- 
divided half  part  thereof  to  my  said  adopted 
daughter  and  niece,  Elizabeth  Seaman,  during  her 
natural  life,  and  upon  her  decease  I  give,  devise  and 
bequeath  said  equal  undivided  one-half  part  of  my 
estate  so  held  in  trust  for  my  said  adopted  daughter 
and  niece,  to  the  children  of  my  nephew,  George  A. 
Seaman,  living  at  the  time  of  her  death,  share  and 
share  alike. 

Seventh:  I  direct  and  order  my  said  executors 
hereinafter  named  to  apply  and  pay  over  the  income 


37 

of  the  other  equal  undivided  half  part  of  my  estate 
so  held  in  trust  by  them  to  my  said  adopted  son  and 
nephew,  George  A.  Seaman,  during  his  natural  life, 
and  upon  his  decease,  I  give,  devise  and  bequeath 
the  said  equal  undivided  half  of  my  estate,  so  held 
in  trust  for  my  said  adopted  son  and  nephew,  to 
the  children  of  my  said  nephew,  George  A.  Seaman, 
living  at  the  time  of  his  death,  share  and  share 
alike." 

Both  life  tenants  were  living  at  the  date  of  testator's 
death  and  both  died  in  January,  1893.  When  the  will 
took  effect  there  were  four  living  children  of  George  A. 
Seaman,  who  still  survive  and  who  took  into  their  pos- 
session the  remainders  upon  the  termination  of  the  trust. 
No  inheritance  tax  law  had  been  passed  when  the  will 
took  effect,  but  the  Act  of  1892  was  in  force  when  the 
life  tenants  died  and  possession  of  the  remainder  passed 
to  the  four  children.  The  question  involved  is,  whether 
the  vesting  in  possession  which  occurred  after  1892  is  a 
transfer  or  succession;  then  for  the  first  time  passing, 
and,  taxable  under  the  Act  of  1892,  or,  if  not  then  first 
occurring,  is  it  made  taxable  by  the  explicit  language  of 
the  statute.  The  Court  held:  ^'The  right  of  the  State  at- 
taches when  the  right  of  succession  accrues.  The  suc- 
cession in  the  remaindermen  was  effective  at  the  time  of 
decedent's  death,  viz:  in  1876,  and  such  successions  are 
not  taxable."    Matter  of  Seaman,  147  N.  Y.  69. 

46.  Dower  and  Curtesy — Not  Taxable  and  Must  be 
Subtracted  from  Property  Chargeable 
Therewith. 

A  dower  interest  in  real  estate  should  be  valued  and 
deducted  from  the  value  of  that  property  to  which  the 
dower  is  chargeable.  The  difference  or  balance  is  tax- 
able.    The  value  of  the  dower  interest  is  not  taxable. 


38 

Matter  of  Shields,  124  N.  Y.  S.  1003;  Matter  of  Riemann, 
87  N.  Y.  S.  731.  Green's  Estate,  129  N.  Y.  S.  54.  Re 
Starhuck,  137  App.  Div.  (N.  Y.)  866. 

47.  Dower — Is  Taxable  in  Illinois  under  Act  of 

1895. 

Albert  M.  Billings  died  testate,  a  resident  of  Chicago, 
on  February  7th,  1897,  leaving  a  large  estate.  By  the 
will  his  widow  took  a  life  estate  in  the  entire  property. 
The  remainder  was  limited  as  follows :  To  C.  K.  G.,  a 
second  life  estate  in  two-thirds  of  the  remainder  and  to 
a  grandson  a  second  life  estate  in  one^third  of  the  re- 
mainder. The  widow  renounced  the  provisions  of  the 
will  and  elected  to  take  her  dower  and  legal  share  under 
the  statute.  This  accelerated  the  second  life  estates  to 
first  life  estates.  It  was  contended  that  dower  does  not 
pass  by  the  intestate  laws  of  the  State  and  that  the 
Inheritance  Tax  Law  of  1895,  therefore,  did  not  include 
a  tax  upon  dower.  The  Court  held  that  the  words  *  in- 
testate laws''  as  used  in  the  statute  do  not  refer  to  any 
specially  designated  laws  but  that  intestate  laws  mean 
all  laws  or  systems  of  laws  which  govern  the  devolution 
of  estates  of  persons  dying  intestate  and  include  all  ap- 
plicable rules  of  common  law  in  force  in  this  State,  and 
that  dower  and  the  legal  share  of  the  widow  passed  by 
the  intestate  laws  and  was  taxable  under  the  Inheritance 
Tax  Act  of  Illinois  in  force  July  1st,  A.  D.  1895.  Billings 
V.  People,  189  111.  472.  Also  see  Re  Sanford's  Estate, 
133  N.  W.  870  (Neb.) 

48.  Award. 

This  question  has  not  been  the  subject  of  particular 
judicial  consideration  by  the  Illinois  Supreme  Court, 
but  in  Billings  v.  The  People,  189  111.  472,  the  court  re- 


39 

fers  to  award   in   commenting   upon   the   taxation   of 
dower. 

In  Re  James  Holden  Estate,  appraisement  No.  2173, 
the  County  Court  of  Cook  County  held  that  award,  like 
dower,  passed  by  the  intestate  laws  as  defined  in  Bill- 
ings V.  People,  supra;  award  being  a  share  of  decedent's 
property  passing  by  death  to  the  party  entitled  and  in 
the  amount  as  determined  by  statute,  and  therefore  tax- 
able. 

49.     Ante-Nuptial   Contract — When  Taxable. 

Marshall  Field  was  married  September  5th,  1905. 
Prior  to  the  marriage  and  in  contemplation  thereof  the 
contracting  parties  entered  into  an  ante-nuptial  agree- 
ment, by  which  it  was  provided,  among  other  things,  that 
if  Mrs.  Field  survived  her  husband  she  should  receive 
$1,000,000.00  out  of  the  property  and  estate  of  Marshall 
Field  in  satisfaction  of  all  claims,  demands  and  rights 
which  she  might  otherwise  have  in  and  to  the  property 
or  estate  of  her  husband  as  his  widow.  Field  died  in 
1906  leaving  Mrs.  Field  surviving.  She  presented  a  claim 
to  the  Probate  Court  for  $1,000,000.00,  based  upon  the 
ante-nuptial  agreement,  which  was  allowed  and  paid  to 
her  by  the  executors  of  the  estate.  It  was  contended  by 
the  executors  that  the  right  of  Mrs.  Field  to  said 
$1,000,000.00  did  not  pass  to  her  by  will  or  the  intestate 
laws  of  the  State,  but  was  a  legal  debt  due  her  under  a 
valid  contract  made  upon  a  valuable  consideration  and 
was  not  an  inheritance.  Counsel  for  the  State  contended 
that  the  ante-nuptial  contract  was  a  method  of  admeas- 
urement of  dower  substituted  by  the  parties  for  the 
method  provided  by  law  for  determining  the  same  and 
that  said  $1,000,000.00  was  paid  to  and  received  by  said 


40 

widow  as  the  full  amount  of  her  dower  and  other  rights 

of  inheritance.    The  Court  said : 

*' Whatever  may  have  heen  decided  in  other  juris- 
dictions, it  is  well  determined  in  this  State  that 
.dower  less  the  exemption  provided  by  statute  is  sub- 
ject to  the  inheritance  tax  {Billings  v.  People,  189 
111.  472).  It  would  seem  logically  to  follow  that  if 
the  provision  made  for  Mrs.  Field  in  the  ante- 
nuptial contract  was  in  lieu  of  and  substituted  for 
her  dower  and  other  rights,  she  would  have  had  in 
the  estate  of  Marshall  Field,  as  his  widow,  it  would 
also  be  subject  to  the  inheritance  tax.  The  Court 
said,  in  Billings  v.  People,  supra:  *It  will  be 
noticed  that  neither  dower  nor  any  provision  made 
in  lieu  of  dower  is  exempted.' ''  People y. Estate  of 
Marshall  Field,  248  111.  147. 

50.  Ante-Nuptial  Contract— Not  Taxable. 

An  ante-nuptial  contract  creates  a  debt  in  favor  of  the 
widow.  Debts  are  not  taxable.  Matter  of  Baher,  83  App. 
Div.  (N.  Y.)  530;  82  N.  Y.  S.  390;  Aff'd  178  N.  Y.  575. 

51.  Ante-Nuptial    Contract    to    Make    a    Will- 

Transfer  is  by  AVill  and  Taxable. 

George  W.  Kidd  died  December  3rd,  A.  D.  1901,  pos- 
sessed of  a  large  estate.  Prior  to  death  he  entered  into 
an  agreement  with  a  Mrs.  Dickinson  whereby  it  was  pro- 
vided that  in  consideration  of  the  marriage  of  Mrs.  Dick- 
inson with  Kidd,  and  the  payment  to  him  of  $40,000.00, 
to  be  used  in  his  business,  said  Kidd  would  adopt  Grace 
G.  Dickinson,  daughter  of  Mrs.  Dickinson,  give  her  his 
name  and  make  her  his  heir,  etc.  Decedent  died  without 
issue  of  the  marriage  and  failed  to  transfer  his  property 
to  Grace  G.  Dickinson  as  provided  by  the  ante-nuptial 
contract.  In  a  proceeding  in  the  Supreme  Court  it  was 
decreed  that  the  contract  was  valid  and  that  the  property 
should  pass  to  Grace  G.  Dickinson  pursuant  to  the  terms 


41 

thereof,  viz. :  as  the  heir  of  decedent.  The  Court  held  in 
an  Inheritance  Tax  proceeding  that  the  trustees  under 
the  will  held  the  property  for  Grace  G.  Dickinson,  and 
that  she  took  the  property  as  devisee  under  the  will,  and 
was,  therefore,  taxable.    Matter  of  Kidd,  188  N.  Y.  274. 

52.     Advancements — Taxable   under   Federal*    In- 
heritance Tax  Laxr. 

Banks,  Sr.,  in  February,  1869,  conveyed  to  his  son  a 
lot  of  land  of  the  value  of  $12,000.00.  In  1865  Banks, 
Sr.,  executed  his  will,  providing  for  legacies  to  his  four 
sons.  Said  will  provided:  **A11  advances  which  may 
hereafter  be  made  to  either  of  my  sons  shall  be  charged 
against  said  sum  as  an  advance,  and  shall  bear  interest 
from  the  time  he  shall  receive  the  same. ' '  Testator  died 
in  1871.  An  appraisement  proceeding  was  had  under 
the  Federal  Inheritance  Tax  Act  of  June  30th,  1864,  Sec- 
tion 132  of  which  includes  a  tax  on  property  transferred 
by  ^*deed  of  gift  or  other  assurance  of  title  made  without 
valuable  or  adequate  consideration.''  The  Court  held: 
At  the  time  the  deed  was  executed  the  defendant  had  no 
proprietary  interest  in  the  property  of  his  father.  He 
had  no  expectant  estate  therein.  The  valuable  and  ade- 
quate consideration  referred  to  in  Section  132  must  be 
held  to  mean  money  paid  or  some  interest  parted  with 
or  service  rendered.  This  deed  was  within  the  statutory 
definition  of  a  succession  and  a  tax  of  $120.00  was  there- 
fore assessed.     Z7.  S,  v.  Banks,  17  Fed.  Eep.  322. 


♦Repealed. 


42 

53.  Community     Property  —  California     Statute 

Taxing  Same  Does  not  Impair  Obligation 
of  Contract. 

Moffitt  was  married  in  California  in  1863  and  there  re- 
sided with  his  wife  until  his  death  in  1906.  By  the  will 
of  decedent  his  estate  passed  to  his  wife  and  children  in 
the  same  proportions  as  if  he  had  died  intestate.  Dece- 
dent's estate  was.  subjected  to  an  Inheritance  Tax  under 
the  Law  of  1905  (California).  The  single  question  pre- 
sented was — ** "Whether  the  surviving  wife's  share  of  the 
community  property  is  subject  to  this  Inheritance  Tax''! 
The  California  Supreme  Court  decided  that  the  Inherit- 
ance Tax  Law  of  1905  did  not  violate  the  contract  clause 
or  due  process  clause  of  the  constitution  (153  Cal.  359). 
The  case  was  then  taken  to  the  Supreme  Court  of  the 
United  States,  which  Court  decided  among  other  things, 
that  the  nature  and  character  of  the  right  of  the  wife  in 
the  community  for  the  purpose  of  taxation  was  pecu- 
liarly a  local  question  which  was  not  reviewable  in  the 
Supreme  Court  of  the  United  States.  Mofjitt  v.  Kelly, 
31  Sup.  Ct.  Kep.  79. 

54.  Gifts  Inter  Vivos — "When  not  Perfected. 

Decedent  instructed  her  attorney  to  invest  $20,000  for 
her  daughter  Marie  and  $20,000  for  her  granddaughter. 
These  investments  were  not  made  prior  to  the  death  of 
decedent,  nor  was  there  any  written  evidence  thereof  to 
establish  that  the  gifts  were  effected.  The  Court  held 
there  was  no  delivery  and  that  both  sums  were  subject  to 
the  Inheritance  Tax.    Re  Myers  Estate,  129  N.  Y.  S.  194. 

55.  Par.  1,  Sec.  1.     WTien  the  Transfer  is  by  Will 

or  by  the  Intestate  Laws  of  This  State  from 
Any  Person  Dying  Seized  or  Possessed  of 
the  Property  While  a  Resident  of  the  State. 


43 

56.  Equitable  Conversion— General. 

The  doctrine  of  equitable  conversion  is  an  outgrowth 
of  the  maxim  of  equity,  that  which  ought  to  have  been 
done  is  to  be  regarded  as  done.  The  doctrine  of  equita- 
ble conversion  is  recognized  in  equity  only  and  is  not 
given  effect  in  courts  of  law.  Connell  v.  Crosby,  210  111. 
380;  Re  Swift,  137  N.  Y.  77 ;  McCurdy  v.  McCurdy,  83  N. 
E.  881;  Matter  of  Sutton,  3  App.  Div.  (N.  Y.)  208. 

57.  Equitable  Conversion  not  Applicable  to  Sub- 

ject Property  to  Taxation. 

William  Drury  died  a  resident  of  Illinois  and  by  his 
will  did,  among  other  things,  bequeath  the  residue  of  his 
property,  both  real  and  personal,  to  his  wife,  for  and 
during  her  natural  life  and  at  her  death  the  property 
remaining  to  be  converted  by  the  trustee  into  money  so 
as  to  divide  the  fund  into  one  hundred  (lOO)  parts  of 
equal  amounts..  Said  trustee  was  directed  to  pay  nine  of 
such  parts  to  specified  legatees  and  devote  the  remaining 
ninety-one  hundredths  to  founding  **The  William  and 
Vashti  College".  Decedent  left  neither  child,  children 
nor  descendants  thereof  surviving.  The  widow  re- 
nounced the  will  and  elected  to  take  under  the  law.  Said 
decedent  died  seized  of  real  estate  in  Illinois,  Kansas, 
Colorado,  Nebraska  and  Texas.  It  was  sought  to  subject 
not  only  the  real  estate  in  Illinois  and  all  the  personal 
property,  but  also  the  real  estate  outside  of  Illinois  to 
taxation  under  the  Inheritance  Tax  Law  in  force  July 
1st,  1895.    The  Court  held: 

**The  will  directs  the  conversion  of  the  real  estate 
into  money  for  the  purpose  of  creating  a  fund  to  be 
devoted  to  the  establishment  of  the  college,  and  it 
is.  argued  that  under  the  doctrine  of  equity  the  land 
is  to  be  regarded  as  converted  into  personalty  and 


44 

it  is  urged  that  the  bequest  of  the  proceeds  of  the 
sale  of  the  real  estate  is  subject  to  the  tax  as  being 
personalty.  The  doctrine  of  equitable  conversion  is 
an  outgrowth  of  the  maxim  of  equity  that  in  a  court 
of  equity  that  which  ought  to  have  been  done  is  to 
be  regarded  as  done.  The  doctrine  of  equitable  con- 
version is  recognized  in  equity  only  and  is  not  given 
effect  in  courts  of  law.  (7  Am.  &  Eng.  Ency.  of 
Law,  2nd  Ed.  465.)  It  cannot  be  applied  in  proceed- 
ings, for  the  collection  of  inheritance  or  succession 
tax.  In  re  Swift's  Estate,  32  ^,^,1096.  *  *  *'' 
Connell  v.  Croshy,  210  111.  380-390. 

58.  Personal    Property — Testamentary    Direction 

to  Convert  Real  Into  Personal  Property. 

Decedent  Abendroth  directed  by  will  that  his  real 
estate  be  converted  to  personal  property,  and  bequeathed 
his  daughter  a  share  of  the  proceeds. 

The  daughter  survived  but  died  before  the  conversion. 
In  an  appraisement  of  the  daughter's  estate,  the  Surro- 
gate held  that  she  died  possessed  of  a  share  in  real  es- 
tate owned  by  Abendroth. 

The  Appellate  Division  reversing  this  holding,  said: 
The  daughter  died  possessed  of  a  right  to  compel  a 
conversion  and  distribution.  The  test  is  whether  the 
property  would  pass  under  the  statute  of  distributions  or 
descent.  The  property  became  in  equity  personal  prop- 
erty and  so  passed  by  the  daughter's  will.  Matter  of 
Mills,  67  N.  Y.  S.  956;  32  Misc.  Kep.  (N.  Y.)  493. 

59.  Property    Physically  Situate  at    Domicile  of 

Oixrner. 

Property,  real  and  personal,  and  all  interests  in  or 
evidences  thereof  situate  at  the  domicile  of  the  owner 
is  within  the  jurisdiction  of  the  taxing  state,  subject  to 
its  succession  laws,  and  taxable.  Connell  v.  Crosby,  210 
111.  380 ;  People  v.  Billings,  189  111.  472. 


45 

60.  lieasehold  Interest. 

A  leasehold  interest  in  land  is  personal  property  and 
taxable.  Estate  of  Althause,  63  App.  Div.  (N.  Y.)  252, 
aff'd  168  N.  Y.  670. 

61.  Domicile  within  tlie  State — Chattels  withont 

the  State. 

Personal  property  physically  situate  in  the  State  of 
New  Jersey,  at  the  time  of  the  death  of  the  owner,  who 
was.  domiciled  in  New  York,  passes  by  the  succession 
laws  of  New  York,  and  is  taxable  in  that  State.  Re 
Swift,  137  N.  Y.  77;  32  N.  E.  1096;  18  L.  R.  A.  709. 

62.  Property  in  Foreign  State — Taxable  at  Domi- 

cile of  Decedent. 

The  personal  property  of  a  resident  decedent  located 
without  the  domiciliary  state  is  taxable  under  the  suc- 
cession laws  of  the  domicile.    McCurdy  v.  McCurdy,  83 

N.  E.  881.  ; ;  ig 

63.  Personal  Property — Share  in  a    Joint    Stock 

Association  Oivning  Real  Estate. 

.  Decedent  died  August  12th,  1891,  a  resident  of  New 
York,  possessed  of  46  shares  of  a  joint  stock  ass.ociation. 
Said  association  was  formed  in  1872  and  the  articles  of 
said  association  provided,  among  other  things,  as  fol- 
lows: 

**A11  the  property,  real  and  personal  and  all  the 
goods  and  chattels.,  choses  and  rights  in  action  and 
credits  of  every  name  and  nature,  with  the  evidence 
thereof,  including  the  good  will  of  its  business  of 
the  association  heretofore  existing,  are  put  in  by  the 
undersigned,  who  are  the  owners  thereof  and  con- 
stitute the  value  of  the  shares  of  the  association, 
etc.'^ 


46 

Under  the  Inheritance  Tax  Act  of  1885,  as  amended 
in  1887,  real  property  was  exempt  from  taxation  and  it 
was  contended  by  the  comptroller  that  the  shares,  of  the 
decedent  in  said  stock  association  were  personal  prop- 
erty and  not  real  estate. 

Held,  that  said  stock  association  was  not  a  corpora- 
tion, but,  that  as  to  the  nature  of  the  shares  of  stock  is- 
sued, the  same  principles,  of  law  are  to  be  invoked  that 
apply  to  a  corporation.  That  such  association  is  an 
entirety  and  that  the  shares  of  stock  therein  are  per- 
sonal property  and  subject  to  taxation.  Matter  of  Jones, 
172N.  Y.  575;65N.  E.  570. 

64.  liif  e  Insurance — Payable  to  Legal  Representa- 

tives or  Assigns. 

Where  the  life  insurance  of  a  decedent  is  made  pay- 
able to  his  administrators,  executors,  or  assigns.,  or  to 
his  legal  representatives,  such  insurance  is  property 
owned  by  decedent  at  the  time  of  death  and  is  taxable 
under  the  Law  of  1885,  as  amended  in  1887  (N.  Y.). 
Matter  of  Knoedler,  140  N.  Y.  377;  35  N.  E.  601. 

65.  United  States  Bonds — ^"When  not  Taxable. 

The  Legislature  may  subject  the  succession  to  United 
States  bonds,  to  a  tax.  However,  under  the  Transfer 
Tax  Act  of  1892,  Ch.  399,  which  defines  the  meaning  of 
the  words  ^^ estate''  and  '^property"  and  limits  the  as- 
sessment of  a  tax  to  such  property  over  which  the  State 
has  jurisdiction,  United  States  bonds  are  not  taxable,  as 
they  are  without  the  meaning  and  definition  of  Para- 
graph 22  of  said  Law.  Matter  of  Sherman,  153  N.  Y.  1 ; 
Matter  of  Sherman,  15  App.  Div.  (N.  Y.)  628,  aff 'd. 


47 


66.  United  States  Bonds— When  Taxable. 

Decedent  died  October  24th,  1898,  possessed  of  United 
States,  bonds  which  were  issued  under  the  Act  of  July 
14th,  1870,  and  which  said  Act  provides  for  the  exemp- 
tion from  taxation  as  follows:  **From  taxation  in  any 
form  by  or  under  State,  Municipal  or  Local  Authority''. 
Each  bond  contains  a  clause  to  such  effect.  The  Court 
held:  Prior  to  the  Transfer  Tax  Act  of  1892  United 
States  bonds  were  taxable.  Matter  of  Howard,  5  Dem. 
483;  Matter  of  Carver,  4  Misc.  Rep.  592;  Matter  of 
Tuigg's  Estate,  15  N.  Y.  S.  548;  Matter  of  Whiting,  2 
App.  Div.  (N.  Y.)  590.  And  this  was  the  view  taken  by 
apparently  the  only  Federal  Court  that  has  passed  on 
the  question  {Wallace  v.  Myers,  38  Fed.  Rep.  184,  cited 
with  approval  in  V.  S,  v.  Perkins,  163  U.  S.  625,  629). 
By  the  Act  of  1898  (New  York)  Ch.  88,  the  words  which 
the  Court  of  Appeals  in  re  Whiting  and  Sherman  uhi 
supra  construed  as  indicating  an  intention  not  to  tax 
bonds,  were  omitted  from  the  section  in  question.  Bonds 
were  held  taxable.  Matter  Plummer,  30  Misc.  Rep.  (N. 
Y).  18,  aff'd  Plummer  v.  Coler,  178  U.  S.  115. 

67.  United  States  Bonds— 'When  Taxable. 

**It  is  lawful  for  the  State  to  withhold  altogether 
the  privilege  of  acquiring  property  within  its  do- 
minion by  will  or  inheritance,  whether  the  property 
consists  of  government  bonds  or  anything  else.  It 
is  lawful  for  the  Legislature  to  annex  any  condi- 
tions to  the  privilege  which  may  seem  expedient  and 
do  not  conflict  with  the  organic  law  of  the  State  or 
the  constitution  or  laws  of  the  United  States  {Mager 
V.  Grima,  8  How.  490). '^  Wallace  v.  Myers,  38  Fed. 
Rep.  184;  Strode  v.  Commonwealth,  52  Pa.  181. 


48 


68.  Par.  2,  Sec.  1.  When  the  Transfer  is  by  Will 
or  Intestate  Laws  of  Property  within  the 
State  and  the  Decedent  Was  a  Non-Resi- 
dent  of  the  State  at  the  Time  of  His  Death. 


69.  Non-Resident's  Property  Situate  in  New  York 

not  Taxable  under  Act  of  1885. 

Before  the  ameudment  of  1887,  property  within  New 
York  passing  by  will  or  the  laws  of  intestacy  from  a 
nonresident  decedent  was  not  taxable.  Matter  of  Ens- 
ton,  113  N.  Y.  174;  Matter  of  Tulane,  51  Hun  213. 

70.  Property  within  the  State— When  Taxable. 

Eomaine  died  intestate  in  September,  1888,  domiciled 
at  Petersburg,  Virginia.  At  the  time  of  his  death  he  was 
the  lessee  of  a  safe  deposit  box  in  New  York  which  con- 
tained securities  consisting  of  stocks  and  bonds  of  dif- 
ferent corporations  and  a  mortgage  upon  real  estate  in 
New  York  City,  as  well  as  several  pas<s  books  showing 
deposits  by  him  in  various  savings  banks  in  the  same 
city.  It  did  not  appear  whether  said  stocks  and  bonds 
were  issued  by  foreign  or  domestic  corporations.  Let- 
ters of  administration  were  is.sued  upon  his  estate  by  the 
surrogate  of  the  County  of  New  York  in  October,  1888, 
and  subsequently  thereto  an  appraisement  proceeding 
was  had  and  all  of  said  assets  taxed  under  the  Inherit- 
ance Tax  Act  of  1885,  as  amended  in  1887. 

The  Court  held: 

**The  appellant  further  contends  that  the  prop- 
erty in  question  was  not  *  within  this  state'  accord- 
ing to  the  true  meaning  of  the  statute,  and  the  con- 
tention is  supported  by  the  argument  that  it  would 
be  unreasonable  to  tax  money  found  upon  the  per- 
son of  a  nonresident  who  died  while  travelling  in 
this  state.    We  should  hesitate  before  applying  the 


49 

statute  to  any  property  casually  brought  into  the 
State  for  a  temporary  purpose,  as  by  a  visitor  or 
traveller,  but  the  record  before  us  does  not  present 
such  a  case.  It  might  well  be  held  that  such  prop- 
erty, although  literally  *  within  this  state',  was  not 
here  in  the  s.ense  meant  by  the  statute,  on  account  of 
the  transitory  and  accidental  character  of  its  pres- 
ence and  the  immediate  custody  of  the  owner.  {Her- 
ron,  Treasurer,  v.  Keeran,  59  Ind.  472,  476.)  Where, 
however,  the  money  of  a  nonresident  is  invested  in 
this  State,  as  it  was  by  Mr.  Eomaine  in  the  bonds 
and  mortgage  in  question,  and  in  the  deposits  made 
by  him  in  the  savings  baaks,  or  where  the  property 
of  a  nonresident  is  habitually  kept,  even  for  safety, 
in  this.  State,  we  think  that  the  statute  applies  both 
in  the  letter  and  spirit.  Such  property  is  within 
this  State  in  every  reasonable  sense,  received  the 
protection  of  its  laws  and  has  every  advantage  from 
government,  for  the  support  of  which  taxes  are  laid, 
that  it  would  have  if  it  belonged  to  a  resident.  We 
think  that  a  fair  construction  of  the  Act  permits  no 
distinction  as  to  such  property,  based  simply  upon 
the  residence  of  the  deceased  owner.  We  have  noth- 
ing to  do  with  the  policy  of  the  s.tatute,  as  our  duty 
is  discharged  when  we  declare  its  meaning  and  ap- 
ply it  to  the  case  in  hand.  That  duty  we  discharge 
in  this  instance  by  adjudging  that  succession  to  the 
personal  property  in  question,  lately  belonging  to 
Worthington  Romaine,  a  nonresident  intestate,  but 
invested  or  habitually  kept  by  him  in  this  State,  is 
taxable  under  the  Collateral  Inheritance  Act,  inso- 
far as  it  passed  to  persons  not  excepted  from  its 
provisions''.    Matter  of  Romaine,  127  N.  Y.  80. 

71.  Property  Tvithin  tlie  State — Ancillary  Admin- 
istration Cannot  be  Invoked  to  Increase 
Tax.     Mortf^age  Deducted. 

Decedent  died  a  resident  of  New  Jersey  seized  of  real 
estate  situated  in  the  State  of  Massachusetts,  which  was 
subject  to  a  mortgage  of  $120,000.00,  payable  to  the  Cam- 
bridge Savings  Bank  of  Massachusetts.     Decedent  also 


50 

left  personal  estate  in  Massachnsetts  of  the  value  of 
$9,000.00.  The  question  involved  was  whether  the  Col- 
lateral Inheritance  Tax  Act  shall  be  computed  upon  the 
value  of  the  property  without  deducting,  the  mortgage 
or  upon  the  value  of  the  equity.  It  was  also  contended 
that  ancillary  administration  in  Massachusetts  could  be 
had  whereby  property  from  the  domiciliary  could  be 
brought  into  Massachusetts  to  pay  the  indebtedneas. 
Held,  that  the  tax  was  assessable  on  the  equity ;  that  an- 
cillary administration  could  not  be  invoked  to  bring  in 
property  for  the  purpose  of  paying  the  indebtedness  in 
Massachusetts.  McCurdy  v.  McCurdy,  83  N.  E.  (Mass.) 
881. 

72.     Real  Estate — United  States  and  Other  Bonds 
Cash  and  Notes  ixrithin  the  State. 

One  Winslow  died  testate  a  resident  of  the  State  of 
New  York,  the  owner  of  real  estate  and  personal  prop- 
erty situate  in  the  State  of  Massachusetts.  The  per- 
sonal property  consisted  of  cash,  municipal,  railroad  and 
United  States  bonds.  One  block  of  bonds  was  issued  by 
the  City  of  Zanesville,  Ohio;  another  by  the  State  of 
New  Hampshire.  One  of  the  questions  involved  was 
whether  the  real  and  personal  property  in  Massachu- 
setts was  taxable  under  the  Inheritance  Tax  Laws  of 
that  State.     The  Court  held: 

**Much  discussion  has  been  had  in  other  Courts 
under  statutes  somewhat  like  ours,  in  regard  to 
stocks,  bonds,  promissory  notes,  and  other  similar 
property.  The  Court  of  Appeals  in  New  York,  in  a 
very  recent  case,  held  that  stocks  in  local  corpora- 
tions, and  negotiable  bonds  found  within  the  State, 
belonging  to  the  estate  of  a  nonresident  decedent, 
are  subject  to  a  succession  tax.  In  re  Morgan,  150 
N.  Y.  35.  In  re  Houdayer,  150  N.  Y.  37.  The  same 
doctrine  is  held  in  well  considered  cases,  in  Mary- 


51 

land  and  North  Carolina.  State  v.  Dalrymple,  70 
Md.  294.  Alvany  v.  Powell^  2  Jones  Eq.  51.  It  has 
been  held  that  the  statute  in  Pennsylvania  was  *  in- 
tended to  embrace  only  personal  property  of  a  tan- 
gible nature,  actually  situated  or  us.ed  for  business 
purposes  within  the  commonwealth,  and  not  to  mere 
certificates  of  indebtedness,  such  as.  government 
bonds,  whose  situs  necessarily  follows  the  owner's 
domiciP.  Orcutt's  appeal,  97  Penn.  St.  179,  186.  In 
England  it  has  been  decided  that  succession  duties 
under  the  St.  16  &  17  Vict.  c.  51,  are  not  payable 
on  legacies  of  personal  property  in  England,  given 
by  the  will  of  a  tes.tator  domiciled  abroad.  Wallace 
V.  Attorney  General,  L.  R.  1  Ch.  1.  In  this  deci- 
sion the  Court  followed  and  applied  the  rule  stated 
in  Thomson  v.  Advocate  General,  12  CI.  &  F.  1,  in 
regard  to  duties  on  legacies  under  the  St.  of  36  Geo. 
Ill  c.  52.  But  probate  duties  under  the  St.  of  55 
Geo.  Ill  c.  184,  are  payable  upon  property  belong- 
ing to  estates  of  nonresident  decedents  like  that  in 
the  case  before  us.  Femande's  case,  L.  R.  5  Ch.  314. 
Attorney  General  v.  Bomvens,  4  M.  &  W.  171.  The 
language  of  our  statute  is  too  clear  to  admit  of  a 
doubt  that  such  property  as  that  to  which  we  have 
referred  was  intended  to  be  covered  by  it.''  Callor- 
han  v.  Woodbridge,  171  Mass.  595. 


73.  Stocks  and  Bonds  of  Domestic  Corporations 
Taxable  in  Illinois— Stocks  and  Bonds  of 
Foreign  Corporations  not  Taxable  (Laws 
1895). 

Sanford  died  testate,  October  28th,  1906,  domiciled  in 
the  State  of  New  York.  During  the  last  fourteen  years 
of  his  life  he  spent  considerable  time  in  Chicago,  where 
he  stayed  at  the  home  of  his  sister.  Decedent's  will  was 
admitted  to  probate  in  Cook  County  on  petition  of  said 
sister,  and  was.  also  probated  in  the  State  of  New  York. 
Said  sister  qualified  as  one  of  the  executors  under  his 
will.    The  decedent  maintained  a  safe  deposit  box  in 


52 

the  City  of  Chicago  for  fourteen  years  previous  to  his 
death  and  there  was  found  therein  at  the  time  of  his 
death  stocks  and  bonds  of  Illinois  corporations  and 
s.tocks  and  bonds  of  foreign  corporations.  This  prop- 
erty was  listed  in  the  inventory  of  the  Illinois  executor 
and  distributed  to  the  beneficiaries  under  the  will,  by  or- 
der of  the  Probate  Court  of  said  State.  It  was  con- 
tended by  The  People  that  both  stocks  and  bonds  of  for- 
eign and  domestic  corporations  were  taxable,  first,  be- 
cause they  were  situate  in  the  State  for  safekeeping,  and 
second,  because  they  were  administered  upon  within  the 
jurisdiction  of  this  State.  On  an  appeal  to  the  Supreme 
Court,  it  was  held : 

**The  law  under  which  the  tax  was  here  imposed 
went  into  force  on  July  1st,  1895.  The  first  section 
of  that  law,  so  far  as  it  applies  to  the  question  now 
under  dis.cussion,  reads  *  *  *.  It  is  earnestly 
insisted  by  counsel  for  appellees  (executor)  that 
none  of  the  personal  property  of  decedent  found  in 
the  State  is  subject  to  tax  as,  under  a  fair  construc- 
tion of  this  statute,  it  did  not  pass  under  the  laws 
of  this  State  or  under  a  will  operative  by  reason  of 
such  laws.  We  cannot  ass.ent  to  this  view.  The 
provisions  of  our  statute  above  set  forth  are  a  sub- 
stantial copy  of  the  New  York  statute  of  1885  as 
amended  in  1887.  Previous  to  the  adoption  of  the 
statute  in  this  State  the  highest  Court  of  New  York 
has  construed  the  statute  of  that  State  as  applying 
to  es.tates  of  nonresident  decedents.  {Re  Romaine, 
127  N.  Y.  80;  re  Enston,  113  id.  VIA',  re  James,  144 
t<i.  6),  *  *  *.  The  construction  of  the  New  York 
statute  of  1887  by  the  Courts  of  that  State  is  in  en- 
tire harmony  with  the  spirit  and  policy.  The  Legis- 
lature of  Illinois  has  recently  passed  an  act  revising 
the  entire  Inheritance  Tax  Law  (Hurd^s  Stat.  1909', 
p.  1897),  the  first  section  of  which  is  practically  a 
copy  of  the  New  York  Law  of  1892,  so  far  as  it  af- 
fects any  question  raised  or  urged  in  this  case.  Un- 
der the  construction  given  to  said  New  York  Law  of 


53 

1892  by  the  Courts  of  that  State,  all  of  the  personal 
property  of  decedent  found  in  the  safe  deposit  vault 
in  this  State  would  be  subject  to  the  payment  of  in- 
heritance tax  under  the  law  now  in  force  in  this 
State,  except  the  stock  of  foreign  corporations.  This 
is  conceded  by  counsel  for  appellees.  Furthermore, 
this  Court  and  the  Supreme  Court  of  the  United 
States  have  stated  that  our  statute  of  1895  applied 
to  the  property  of  nonresident  decedents.  Billings 
V.  People,  189  111.  472 ;  Eidman  v.  Martinez,  supra. 
*  *  * .  In  the  Gibbs  estate,  83  N.  Y.  S.  53,  the 
Appellate  Division  of  that  State  held  in  1903  that 
the  bonds  of  a  foreign  corporation,  left  on  deposit 
with  a  bank  in  New  York  at  the  time  of  the  nonresi- 
dent's death  were  not  subject  to  tax.  This  decision 
was  affirmed  by  the  Court  of  Appeals  in  176  N.  Y. 
565  (no  opinion). '' 

The  Court  held  the  Gibbs  case,  although  decided  after 
July  1st,  1895,  was  persuasive  as.  evidencing  a  policy  of 
law  .that  foreign  bonds  kept  in  the  State  by  a  nonresident 
were  not  taxable  under  the  Inheritance  Tax  Act  in  force 
July  1st,  1895.  The  foreign  stocks  were  held  not  taxa- 
ble. But  all  bonds  and  stocks  of  domestic  corporations 
were  decided  to  be  taxable.  People  v.  Griffith,  245  111. 
532. 

74.  Stock   of   Domestic   Corporations— Owned   by 

Non-Resident  Decedent. 

When  certificates  of  stock  of  a  New  York  corporation 
owned  by  nonresident  decedent  are  within  the  State  of 
New  York,  said  stock  is,  taxable.  Matter  of  James,  144 
N.  Y.  6. 

75.  Stock  and  Bonds  of  a  Domestic  Corporation 

»Non-Resident  Owner.    Held  as  Collateral. 

Stocks  and  bonds  of  New  York  corporations  owned  by 
a  nonresident  when  the  certificates  and  bonds  were  with- 


54 

in  the  State  of  New  York,  are  taxable.  When  such  prop- 
erty is  held  as  collateral  it  may  not  be  taxable.  Matter 
of  Pullman,  46  App.  Div.  (N.  Y.)  574. 

76.  Stock — Certificates     and     Owner's     Residence 

"Without  Taxing  State. 

Decedent  died  a  resident  of  Kansas.  At  the  time  of 
his  death  he  had  $10,800.00  in  cash  deposited  with  the 
State  Savings  Bank  of  Council  Bluffs,  Iowa,  and  owned 
25  shares  of  stock  of  said  bank,  which  was  represented 
by  two  certificates  in  the  possession  of  the  decedent  in 
Kansas  at  the  time  of  death.  In  an  appraisement  pro- 
ceeding under  the  Laws  of  Iowa  to  assess  a  tax  on  the 
cash  and  the  shares  of  stock,  the  Court  held:  The  right 
which  a  shareholder  has  in  a  corporation,  by  reason  of 
his  ownership  of  shares  is  a  right  to  participate,  accord- 
ing to  the  amount  of  his  stock  in  the  surplus  profits  of 
ttie  corporation  on  division,  and  ultimately  on  its  disso- 
lution, in  the  assets  remaining  after  payment  of  debts. 
It  follows  that  the  shares  of  stock  involved  represent  an 
interest  in  the  earnings  and  property  of  the  corporation. 
A  certificate  is  not  stock  itself,  but  a  representation 
thereof.  A  share  of  stock  is  personal  property,  but  may 
represent  an  interest  in  real  estate.  The  decedent  owned 
an  interest  in  the  property  of  the  bank  and  such  interest 
is  property  within  this  State  and  is  taxable.  Re  Cul- 
ver's Estate,  123  N.  W.  (Iowa)  743.  See  Matter  of 
Bronson,  150  N.  Y.  1. 

77.  Stock— Decedent  a  Non-Resident  and  Certifi- 

cates Without  the  Taxing  State. 

Decedent  died  testate  a  resident  of  Massachusetts, 
possessed  of  shares  of  stock  in  the  Boston  &  Maine,  and 
Fitchburg  Railroads,  the  certificates  of  which  were  in 


55 

Massachusetts  at  the  time  of  decedent's  death.  The  Bos- 
ton &  Maine  Eailroad  operated  through  and  was  incor- 
porated in  more  than  one  State.  In  an  appraisement  un- 
der the  laws  of  New  Hampshire,  the  Court  held  the 
shares  of  stock  of  a  domestic  corporation,  the  certificates 
of  which  were  at  the  domicile  of  the  nonresident  owner 
at  the  time  of  death,  represented  property  in  New  Hamp- 
shire which  was  subject  to  the  Inheritance  Tax.  Gardi- 
ner V.  Carter,  (N.  H.)  69  Atl.  939. 

78.  Stock — Certificates    and     Owner's     Residence 

Without  the  Taxing  State — Taxable. 

A  resident  of  the  State  of  Connecticut  died  testate  the 
owner  of  shares  of  stock  in  a  New  York  corporation,  the 
certificates  of  which  were  at  the  domicile  of  the  owner 
at  death.  Held,  to  be  taxable  in  New  York  under  the 
Transfer  Tax  Laws  of  1896,  Ch.  908,  Art.  10,  as  amd. 
{Matter  of  Bronson,  150  N.  Y. ;  Matter  of  Fitch,  160  id, 
^1',  Matter  of  Bushnell,  73  App.  Div.  (N.  Y.)  325. 

79.  Situs  of  Stock  for  Taxation. 

**The  share  certificates  which  the  testator  held 
represented  the  interests  which  he  possessed  in  the 
corporations  which  issued  them,  and  the  legal  situs 
of  that  species  of  personal  property  is  where  the 
corporation  exists  or  where  the  share  holder  has  his 
domicile.''    Matter  of  James,  144  N.  Y.  6-12. 

80.  Stock  of  Ne-w  Jersey  Corporation— Not  Taxa- 

ble "Wlien  Owner  Dies  Non-Resident. 

Shares  of  stock  of  a  New  Jersey  corporation  owned 
and  held  by  a  nonresident  without  the  State  of  New  Jer- 
sey at  the  time  of  the  death  of  said  owner,  are  held  to 
be  liable  to  an  inheritance  tax  in  New  Jersey  under  Act 
approved  May  15th,  1894.    The  decision  following  the 


56 

New  York  cases,  as  well  as  the  Massachusetts  and  the 
other  decisions  which  base  the  tax  on  the  nature  and 
character  of  the  shares  of  stock.  Nielson  v.  Russell,  69 
Atl.  (N.  J.)  476.  The  Court  of  Errors  and  Appeals,  in 
reversing  the  case  reversed  the  decision  and  said  in 
part : 

*'Our  Act  was  modeled  after  the  New  York  Act 
of  1885  (Laws  1885,  P.  820,  C.  483,  Sec.  1),  and  if 
we  had  made  no  change  in  that  Act,  we  should  be 
held  upon  well  settled  principles  to  have  adopted 
with  the  Act  the  construction  previously  placed 
thereon  by  the  New  York  Courts  in  the  case  of  Ens- 
ton  ^s  will,  113  N.  Y.  174;  21  N.  E.  87;  3  L.  E.  A.  464. 
In  fact,  however,  we  modified  the  language  of  the 
New  York  Act  by  inserting  at  the  beginning  of  the 
clause  the  words  *all  property'  in  place  of  the  mere 
relative  ^ which'  and  by  adding  the  words  inherit- 
ance, distribution,  bequest,  devise'.  We  are  not, 
therefore,  concluded  by  that  decision.  *  *  *  * 
*  What  is  to  be  taxed,  therefore,  as  far  as  the  pres- 
ent case  is  concerned  is  a  transfer  by  bequest  from 
Mills  to  his  legatees ;  or,  to  use  the  language  of  Mr. 
Justice  Holmes.,  in  Blackstone  v.  Miller,  188  U.  S. 
189,  it  is  the  singular  succession  of  the  legatee,  not 
the  universal  succession  of  the  executors.  That  this 
is  the  true  construction  of  the  Act  is  indicated  fur- 
ther by  the  provisions  of  Section  6  (Gen.  St.  1895, 
P.  3341,  pp.  268)  authorizing  the  executors  to  deduct 
the  tax  from  the  legacy  or  property  for  distribution. 
The  tax  is  not  a  general  charge  against  the  es.tate, 
but  a  charge  upon  the  legacies.  *  *  *  •  The 
question  recurs  whether  the  succession  of  the  lega- 
tees in  the  present  case  was  meant  to  be  taxed.  This 
succession  is  a  succession  under  the  English  law  by 
which  the  validity  and  amount  of  the  beques.t  must 
be  determined.  By  that  law,  as  well  as  by  our  own 
title  to  a  legacy  is  not  complete  and  perfect  until 
the  executor  has  assented,  and  he  ought  not  to  as- 
sent until  creditors  are  satisfied.  This  assent  must, 
of  necessity,  be  the  assent  of  the  executors  at  the 
domicile.    They  alone  can  ascertain  whether  the  ea- 


57 

tate  is  solvent  or  insolvent.  *****  rj^^Q 
succession  to  the  legacy  is  complete  only  in  a  foreign 
jurisdiction  and  it  would  certainly  be  anomalous  to 
tax  that  succession  here.  The  case  differs  from 
those  arising  under  the  New  York  Act  of  1892  and 
statutes  modeled  thereon  which  assume  to  tax  the 
transfer  of  property  within  the  jurisdiction.  Under 
those  statutes  it  is  the  situs  of  the  property  which 
justifies  the  taxation  of  transfer.  Our  statute  of 
1894  does  not  undertake  a  tax  on  transfers  of  all 
property  within  our  jurisdiction,  but  only  transfers 
by  inheritance,  distribution,  bequest  or  devise.  In 
this  respect  our  statute  differs  also  from  the  Mary- 
land Act  which  was  before  the  Court  in  State  v. 
Dalrymple,  70  Md.  294;  17  Atl.  82,  3  L.  R.  A.  372, 
where  the  Act  as  construed  by  the  Court  imposed  a 
tax  upon  all  estates,  real,  personal  and  mixed,  money 
and  public  and  private  securities,  etc.,  being  in  the 
State.  The  Massachusetts  cases  are  not  in  point  for 
a  like  reason.''  Neilson  v.  Russell,  71  Atl.  (N.  J.) 
286. 

81.  Stock— Certificates    and    Owner's     Residence 

"Withont  Taxing  State. 

Shares  of  a  New  Jersey  corporation  owned  by  a  non- 
resident of  that  State  at  the  time  of  his  death,  the  certifi- 
cates representing  said  shares  being  located  at  the  domi- 
cile of  said  decedent  at  death,  are  taxable  under  the  In- 
heritance Tax  Law  of  1894  (P.  L.  1894,  p.  318,  Par.  1). 
Re  Delano's  Estate,  69  Atl.  Eep.  (N.  J.)  482. 

82.  Stock — Decedent  a  Non-Resident^ — Certificates 

Without  the  Taxing  State — Sole  Adminis- 
tration in  Foreign  Jurisdiction  and  Closed 
Before  Tax  Paid  in  New  York. 

Emily  Fitch  died  testate  a  resident  of  Massachusetts 
in  July,  1894.  The  only  administration  had  was  in  Con- 
necticut and  the  executor  was  discharged  before  the  tax 
was  paid  in  New  York  on  the  transfer  of  shares  of  a 


58 

New  York  corporation.  Decedent  died  possessed  of 
stock  of  the  Consolidated  Gas  Company,  a  New  York 
corporation,  the  certificates  of  which  had  been  kept  in 
Connecticut  up  to  the  time  of  decedent's  death.  On 
motion  to  vacate  the  order  appointing  New  York  Ap- 
praiser on  the  ground  that  full  administration  had  been 
had  and  settled  in  Connecticut,  the  Court  held:  The 
shares  of  stock  in  the  Gas  Company  were  personal  prop- 
erty in  the  State  of  New  York,  subject  to  the  Transfer 
Tax  Law  of  1892  {Re  Branson,  150  N.  Y.  1).  A  tax  be- 
came due  and  payable  to  the  State  of  New  York  at  the 
time  of  the  transfer  of  the  shares  and  was  a  lien  upon 
the  property  until  paid.  It  became  the  duty  of  the  ex- 
ecutor of  Mrs.  Fitch's  will  to  request  the  imposition  of 
the  tax  under  the  laws  of  New  York  {Matter  of  Embury , 
19  App.  Div.  (N.  Y.)  218).  The  Surrogate  Court  has 
full  jurisdiction  to  hear  and  determine  all  questions 
arising  under  the  law,  and  it  is  unnecessary  for  ancillary 
adminsitration  to  be  inititated  in  New  York  to  confer 
jurisdiction  on  the  surrogate  to  act  under  the  Transfer 
Tax  Law.  Matter  of  Fitch,  39  App.  Div.  (N.  Y.)  609. 
Aff'd  160  N.  Y.  87. 

83.  Stock — Issued  by  Corporation  With  Property 
in  Tivo  States — Shares  Taxable  at  Full 
Value.     National  Bank  Stock. 

A  resident  of  Maine  died  the  owner  of  shares  of  stock 
in  the  Boston  &  Albany  Eailroad,  a  corporation  organ- 
ized under  the  laws  of  both  Massachusetts  and  New 
York;  and  also  the  owner  of  stock  in  National  Banks, 
organized  under  the  laws  of  the  United  States,  all  the 
certificates  of  which  were  in  the  State  of  Massachusetts. 
The  Court  held:  That  the  Boston  &  Albany  stock  was 
taxable  at  full  value  and  not  on  a  proporitionate  basis: 


59 

that  the  stock  of  National  Banks  doing  business  in 
Massachusetts  was  taxable.  Moody  v.  Shaw,  173  Mass. 
375. 

84.  Stock  of  Corporation  Organized  in  One  State 

— Property  of  Corporation  in  Several  States. 

A  resident  of  Illinois  died  in  1902,  the  owner  of  4855 
shares  of  stock  of  the  N.  Y.  C.  &  H.  R.  B.  B.  Co.,  a  cor- 
poration organized  under  the  laws  of  the  State  of  New 
York.  This  railroad  company  owned  property  in  other 
states  than  New  York.  It  was  contended  by  executor 
that  because  the  corporation  had  but  thirty- six  per  cent 
(36%)  of  the  corporate  capital  located  in  New  York 
that  the  tax  should  be  assessed  in  New  York  upon  only 
36%  of  the  value  of  the  stock.  The  Court  held:  *^The 
assessment  of  the  stockholder  is  computed  upon  the 
value  of  his  interest  in  the  whole  of  the  corporate  prop- 
erty as  evidenced  by  the  number  of  shares  which  he 
holds,  and  the  interest  of  the  deceased  in  the  corpora- 
tion, upon  which  the  tax  is  computed  is  not  determinable 
by  the  location  of  the  corporate  properties".  Matter 
of  Palmer,  183  N.  Y.  238. 

85.  Stock  of  a  Corporation  Organized  in  Tjxro  or 

More     States-^Tazable     on    Proportion     of 
Property. 

Francis  B.  Cooley  died  a  non-resident  of  the  State  of 
New  York,  possessed  of  certain  shares  of  stock  of  the 
Boston  &i  Albany  Bailroad  Company,  which  shares 
passed  by  the  will  of  decedent.  In  an  appraisement  pro- 
ceeding under  the  laws  of  the  State  of  New  York  the 
stock  was  valued  at  its  full  market  value.  The  Boston  & 
Albany  Bailroad  Company  is  a  consolidation  formed  by 
one  or  more  New  York  corporations  and  one  Massachu- 


60 

setts  corporation.  ^^It  was,  so  to  speak,  incorporated  in 
duplicate '\  The  track  mileage  was  about  five-sixths  in 
Massachusetts  and  one-sixth  in  New  York.  The  prin- 
cipal offices,  including  the  stock  transfer  office,  were  sit- 
uated in  Boston.  The  decedent  died  a  resident  of  the 
State  of  Connecticut,  owning  426  shares  of  the  capital 
stock,  the  value  of  which,  at  the  date  of  death,  was 
$252.50  per  share.    The  court  held: 

^^^In  the  present  case  the  decedent,  by  virtue  of 
his  stock  as  between  him  and  the  corporation,  would 
be  regarded  as  having  an  interest  in  all  of  its  prop- 
erty and  entitled  to  the  earnings  thereon  when  dis- 
tributed as  dividends  and  to  his  share  of  the  sur- 
plus upon  dissolution  and  liquidation  proceedings 
independent  of  the  fact  that  there  were  two  sep- 
arate incorporations. 

But,  as  it  seems  to  me,  different  considerations 
and  principles  apply  to  this  proceeding  now  before 
us  for  review.  Our  jurisdiction  to  assess  decedent's 
stock  is  based  solely  and  exclusively  upon  the 
theory  that  it  is  held  in  the  Boston  &  Albany  Rail- 
road Company.  But  we  know  that  said  corporation 
is  also  incorporated  as  a  Massachusetts  corporation 
and  presumably  by  virtue  of  such  latter  incorpora- 
tion it  has  the  same  powers  of  owning  and  manag- 
ing corporate  property,  which  it  possesses  as  a  New 
York  corporation.  In  fact,  the  location  of  physical 
property  and  the  exercise  of  various  corporate  func- 
tions give  greater  importance  to  the  Massachusetts 
than  to  the  New  York  corporation,  and  the  problem 
is,  whether  for  the  purpose  of  levying  a  tax  upon 
decedent's  stock  upon  the  theory  that  it  is  held  in 
and  under  the  New  York  corporation,  we  ought  tg 
say  that  such  latter  corporation  owns  and  holds 
all  of  the  property  of  the  consolidated  corporation 
wherever  situated,  thus  entirely  ignoring  the  exist- 
ence of  and  the  ownership  of  property  by  the 
Massachusetts  corporation.  It  needs  no  particular 
illumination  to  demonstrate  that  if  we  take  such  a 
view  it  will  clearly  pave  the  way  to  a  corresponding 
view  by  the  authorities  and  courts  of  Massachusetts 


61 

that  the  corporation  in  that  State  owns  all  of  the 
corporate  property  wherever  situated,  and  we  shall 
then  further  and  directly  be  led  to  the  unreasonable 
and  illogical  result  that  one  set  of  property  is  at  the 
same  time  solely  and  exclusively  owned  by  two  dif- 
ferent corporations  and  that  a  person  holding  stock 
should  be  assessed  upon  the  full  value  of  his  stock 
in  each  jurisdiction.  Whether  we  regard  such  a  tax 
as  here  being  imposed,  a  recompense  to  the  State 
for  protection  afforded  during  the  life  of  the  de- 
cedent, or  as  a  condition  imposed  for  creating  and 
allowing  certain  rights  of  transfer  or  of  succession 
to  property  upon  death,  we  shall  have  each  state  ex- 
acting full  compensation  upon  one  succession  and 
a  clear  case  of  double  taxation.  And  if  the  corpora- 
tion had  been  compelled  for  sufficient  reasons  to 
take  out  incorporation  in  six  to  twenty  other  states, 
each  one  of  them  might  take  the  same  view  and  in- 
sist upon  the  same  exaction  until  the  value  of  the 
property  was  in  whole  or  large  proportion  exhausted 
in  paying  for  the  privilege  of  succession  to  it.  While 
undoubtedly  the  legislative  authority  is  potent 
enough  to  prescribe  and  enforce  double  taxation,  it 
is  plain  that,  measured  by  ordinary  principles  of 
justice,  the  result  suggested  would  be  inequitable 
and  might  be  seriously  burdensome. 

No  doubt  is  involved,  as  it  seems  to  me,  about  the 
meaning  and  application  of  the  statute.  The  de- 
cedent's stock  was  *  property  within  the  State', 
which  had  its  situs  as  being  held  in  the  New  York 
corporation,  and  the  transfer  of  it  was  taxable  here. 
There  can  be  no  dispute  about  that.  The  question 
is  simply  over  the  extent  and  value  of  his  interest 
as  such  stockholder,  in  view  of  the  other  incorpora- 
tion in  Massachusetts.  I  see  nothing  in  the  statute 
which  prevents  us  from  paying  decent  regard  to  the 
principles  of  interstate  comity  and  from  adopting  a 
policy  which  will  enable  each  state  fairly  to  enforce 
its  own  laws  without  oppression  to  the  subject.  This 
result  will  be  attained  by  regarding  the  New  York 
corporation  as  owning  the  property  situate  in  New 
York  and  the  Massachusetts  corporation  as  owning 
that  situate  in  Massachusetts,  and  each  as  owning  a 


62 

share  of  any  property  situate  outside  of  either  state 
or  moving  to  and  fro  between  the  two  states,  and 
assessing  decedent's  stock  upon  that  theory.  That 
is  the  obvious  basis  for  a  valuation  if  we  are  to  leave 
any  room  for  the  Massachusetts  corporation  and 
for  a  taxation  by  that  State  similar  in  principle  to 
our  own  without  double  taxation.  Some  illustra- 
tions may  be  referred  to,  which  by  analogy  sustain 
the  general  principles  involved. 

Where  a  tax  is  levied  in  this  State  upon  the  cap- 
ital or  franchises  of  a  corporation  organized  as 
this  railroad  was,  the  tax  is  levied  upon  an  equitable 
basis.  Thus  by  the  provisions  of  Section  6  of  Chap- 
ter 19  of  the  Laws  of  1869,  under  which  the  Boston 
&  Albany  Eailroad  was  organized,  the  assessment 
and  taxation  of  its  capital  stock  in  this  State  is  to 
be  in  the  proportion  *that  the  number  of  miles  of 
its  railroad  situated  in  this  state  bears  of  the  num- 
ber of  miles  of  its  railroad  situated  in  the  other 
state',  and  under  Section  182  of  the  General  Tax 
Law  of  the  State  of  New  York  the  franchise  tax  of 
a  corporation  is  based  upon  the  amount  of  capital 
withm  the  state. 

Again,  assume  that  for  purposes  of  dissolution  or 
otherwise  receivers  were  to  be  appointed  of  the 
Boston  &  Albany  Eailroad,  there  can  be  no  doubt 
that  the  receivers  of  it  as  a  New  York  corporation 
would  be  appointed  by  the  courts  of  that  state,  and 
the  receivers  of  it  as  a  Massachusetts  corporation 
would  be  appointed  by  the  courts  of  that  state,  and 
that  the  courts  would  hold  that  in  the  discharge  of 
their  duties  the  New  York  receivers  should  take 
possession  of  and  administer  upon  the  property  of 
the  New  York  corporation  within  the  limits  of  that 
state,  and  would  not  permit  the  Massachusetts  re- 
ceivers to  come  within  its  confines  and  interfere  with 
such  ownership,  and  the  Massachusetts  courts  would 
follow  a  similar  policy.  Why  should  not  the  State 
authorities  for  the  purposes  of  this  species  of  tax- 
ation and  valuation,  involved  therein,  adopt  a  sim- 
ilar theory  of  division  of  property?" 

The  Court  reversed  the  Appellate  Division  (113  App. 


63 

Div.  388)  which  taxed  on  a  full  value  and  directed  a  re- 
appraisement  of  the  stock  on  a  proportionate  basis. 
Matter  of  Cooley,  186  N.  Y.  220. 

86.  Mileage  is  a  Basis  to  Determine  Proportion- 

But  Is  Not  the  Only  Basis. 

In  an  appraisement  to  assess  a  transfer  tax  on  the 
shares  of  stock  of  a  non-resident  of  New  York,  the  sur- 
rogate adopted  the  total  track  mileage  of  the  Boston  & 
Albany  Railroad  and  the  Fitchburg  Railroad  as  the 
basis  for  his  computation.  It  appeared  however,  that 
the  Fitchburg  Railroad  Company  owned  in  the  State  of 
Massachusetts  certain  grain  elevators  and  connecting 
tracks  which  were  described  as  being  *' outside  of  and 
apart  from  the  ordinary  freight  and  passenger  term- 
inals''. This  socalled  special  property  was  deducted  by 
the  surrogate  before  apportioning  the  stock  on  a  mile- 
age basis.  The  Court  held:  **The  valuation  of  stock  is 
a  question  of  fact.  The  decision  of  the  surrogate  in 
this  case,  no  error  of  law  appearing,  is  conclusive  upon 
the  Court  of  Appeals''.  Matter  of  Thayer,  193  N.  Y. 
430,  affirming  Matter  of  Thayer,  126  App.  Div.  (N.  Y.) 
951. 

87.  Stock  of  Corporation  With  Property  in  Two 

or  More  States — Proportion  Taxable. 

In  an  appraisement  of  the  estate  of  a  non-resident  of 
Massachusetts  wherein  it  was  necessary  to  determine 
the  taxability  of  stock  of  a  corporation  organized  in 
more  than  one  state,  held:  That  the  basis  of  value 
should  be  the  proportion  of  the  property  of  the  company 
situated  in  Massachusetts.  Kingsbury  v.  Chapin,  82 
N.  E.  (Mass.)  700. 


64 

88.  Stock  —  Non-Resident  —  Proportionate    Value 

Taxable. 

In  an  appraisement  of  the  estate  of  a  non-resident  of 
the  State  of  New  Hampshire  who  died  the  owner  of 
shares  of  stock  of  corporations  organized  in  New  Hamp- 
shire and  other  states,  it  was  held  that  the  stock  should 
be  taxed  on  a  proportional  basis,  determined  by  the  per- 
centage which  the  property  in  New  Hampshire  bore  to 
the  entire  corporate  property.  Gardiner  v.  Carter,  69 
Atl.  (N.  H.)  939. 

89.  Stock^ — Non-Resident  Ovirnerskip  Requires  An- 

cillary Administration  in  Taxing  State. 

When  a  decedent  dies  a  non-resident  of  New  Hamp- 
shire, the  owner  of  shares  of  stock  in  a  corporation  or- 
ganized both  under  its  laws  and  of  another  State,  an- 
cillary administration  is  required  if  the  shares  are  sub- 
ject to  tax.    Gardiner  v.  Carter,  69  Atl.  (N.  H.)  939. 

90.  Stock  of  National  Banks — Taxable. 

A  resident  of  the  State  of  New  York  died  prior  to 
July  23rd,  1894.  Her  will  was  proved  by  the  Surrogate 
Court  of  New  York  County  and  an  executor  qualified  in 
that  State.  At  the  time  of  her  death,  the  testatrix  was 
possessed  of  real  estate  within  Massachusetts,  and  also 
certain  personalty,  consisting,  among  other  things,  of 
shares  of  stock  of  the  Suffolk  National  Bank  of  Boston, 
and  two  shares  of  the  National  Bank  of  Commerce  of 
Boston.  Also  said  decedent  died  possessed  of  shares  of 
stock  in  the  New  Bedford  Copper  Company,  the  New 
Bedford  Gas  Company  and  the  Fitchburg  Railroad  Com- 
pany and  the  Boston  and  Maine  Railroad  Company,  or- 
ganized under  the  laws  of  Massachusetts;  also  she  died 
possessed  of  shares  of  stock  of  the  First  National  Bank 


65 

of  Boston  and  of  the  Merchants '  National  Bank,  the  Na- 
tional Bank  of  Commerce  and  the  Mechanics'  National 
Bank,  all  located  at  Boston  and  organized  under  the 
laws  of  the  United  States  of  America.  All  of  the  certi- 
ficates evidencing  said  shares  were  located  in  the  State 
of  New  York  at  the  time  of  her  death.  The  Court  held : 

^  ^  There  can  be  no  donbt  that  stock  in  corporations 
organized  under  the  laws  of  this  Commonwealth, 
and  of  national  banking  corporations  located  in  this 
State,  is  property  within  the  jurisdiction  of  the 
Commonwealth,  within  the  meaning  of  this  statute 
(inheritance  tax  act).  Callahan  v.  Woodhridge,  171 
Mass.  595;  Re  Bronson.  150  N.  Y.  1;  Tappan  v. 
Merchants  National  Bonk,  19  Wall.  490,  500;  First 
National  Bank  of  Mendota  v.  Smith,  65  111.  44,  55; 
Street  Railroad  v.  Morrow,  87  Tenn.  406,  427.  Such 
a  corporation  being  in  a  sense,  a  citizen  of  this 
State,  and  having  an  abiding  place  here  akin  to  the 
domicil  of  a  natural  person,  is  subject  to  the  juris- 
diction of  the  Commonwealth,  and  is,  in  fact,  within 
.the  Commonwealth.  The  stockholders  are  the  pro- 
prietors of  the  corporation,  which  is  itself  the 
proprietor  of  the  property  owned  and  used  for  the 
idtimate  benefit  of  the  stockholders.  While  the 
corporation  has  a  full  and  complete  legal  title  to  the 
corporate  property,  its  ownership  is,  in  a  measure, 
fiduciary;  for  on  winding  up  its  affairs  the  surplus, 
after  the  payment  of  debts,  must  be  divided  among 
the  stockholders.  *  *  *  By  the  terms  of  the  stat- 
ute the  succession  to  property  belonging  to  non- 
residents is  subject  to  a  tax  like  that  of  residents  of 
the  Commonwealth.  That  the  certificates  in  the 
present  case  were  in  the  State  of  New  York  at  the 
time  of  the  death  of  the  testatrix  is  immaterial.'' 
Greves  v.  Shaiv,  173  Mass.  205. 

91.     Stock  of  Foreign  Corporations — Not  Taxable. 

Stock  of  a  corporation  organized  without  the  State  of 
Illinois,  the  certificates  of  which  were  owned  by  a  non- 
resident at  death,  and  which  certificates  had  been  held 


66 

for  safe  keeping  for  a  continuous  period  of  fourteen 
years  in  Illinois,  and  were  administered  and  distributed 
in  an  ancillary  proceeding  in  said  State,  are  not  taxable 
under  the  Inheritance  Tax  Law  of  1895.  People  v.  Grif- 
fith, 245  111.  532. 

92.  Stock  of  Foreign  Corporation — Not  Taxable. 

Certificates  of  stock  of  foreign  corporations  physically 
within  the  State  of  New  York  at  the  time  of  the  death  of 
the  owner  who  died  a  resident  of  England,  are  not  tax- 
able under  the  New  York  Act  of  1885  as  amended  in  1887. 
Re  James,  144  N.  Y.  6. 

93.  Bonds  of  Foreign  Corporation  and  Stock  of 

National  Bank  VTithin  tke  State. 

William  H.  Dalrymple  died  testate,  a  resident  of  Cali- 
fornia, November  22nd,  1881.  His  will  was  admitted  to 
probate  in  California  and  subsequently  an  exemplified 
copy  of  said  will  was  admitted  by  the  Registrar  of  Wills 
at  Baltimore,  Maryland.  Thereafter  Letters  of  Admin- 
istration were  issued  by  the  Orphans  Court  at  Baltimore. 
At  the  time  of  the  death  of  decedent  he  was.  entitled  to  an 
undivided  one-fourth  part  of  the  personal  estate  of  his 
brother,  Edwin  A.  Dalrymple,  a  resident  of  the  State  of 
Maryland,  who  died  in  the  City  of  Baltimore  in  October, 
1881,  three  weeks  prior  to  the  decease  of  said  William  H. 
Dalrymple.  Upon  the  settlement  of  Edwin  *s  estate  the 
Maryland  administrators  of  William's  estate  received 
from  said  Edwin's  estate  sundry  certificates  of  ** national 
bank  stock  and  Baltimore  city  stock,  several  Missouri 
state  bonds  and  cash  aggregating  the  sum  of  $27,000.00". 
Upon  this  sum  the  State  of  Maryland  claimed  an  inherit- 
ance tax  on  the  succession  of  Mrs.  Gamble,  a  beneficiary 
under  the  will  of  William.    The  Court  held : 


67 

**  Possessing  the  plenary  power  indicated,  it  neces- 
sarily follows  that  the  State  (Maryland)  in  allowing 
property  actually  located  here  or  personal  property 
situated  els.ewhere  but  owned  by  a  resident,  to  be 
disposed  of  by  will  and  in  designating  who  shall  take 
such  property  where  there  is  no  will  may  prescribe 
such  conditions  not  in  conflict  with  or  forbidden  by 
the  organic  law,  as  the  Legislature  may  deem  expe- 
dient. These  conditions  subject  to  the  limitation 
named  are  wholly  within  the  discretion  of  the  Gen- 
eral Assembly.  The  Act  we  are  now  considering 
plainly  intended  to  require  a  person  taking  the  bene- 
fit of  a  civil  right  secured  to  him  under  our  laws., 
should  pay  a  certain  premium  for  its  enjoyment.     * 

*  *  *  *  The  whole  contention  of  the  appellee  is, 
that  the  words  used  in  the  act  of  assembly,  namely, 

*  being  in  this  state'  refer  to  the  decedent  and  not  to 
the  property.  If  it  be  true  they  do  refer  to  the  per- 
son, the  tax  is  not  collectible  because  William  H. 
Dalrymple  was  a  citizen  of  California  and  domiciled 
there  at  his  death.  If,  on  the  other  hand  they  apply 
to  the  property  the  tax  is  collectible  because  the 
property  is  actually  within  this  State  and  was  so  at 
the  time  of  the  death  of  William  H.  *  *  *  The 
tax,  we  have  s^aid,  is  on  the  transmission  of  the  prop- 
erty *  being  in  the  State'  and  no  reason  has  been  as- 
signed or  can  be  suggested  why  the  broad  language 
of  the  statute  and  evident  design  of  the  Legislature 
should  be  so  narrowed  and  restricted  as  to  exempt 
from  this  tax  the  property  of  a  nonresident  actually 
here,  notwithstanding  the  same  property,  may,  for 
other  purposes,  be  treated  as  constructively  else- 
where. 

It  results  from  what  we  have  said  the  tax  is  pay- 
able in  this  case  and  the  amount  of  the  tax  will  de- 
pend on  the  sum  in  the  hands  of  the  appellees  pay- 
able to  the  legatee".  State  v.  Dalrymple,  70  Md. 
294;  17  Atl.  82;  3  L.  B.  A.  372. 

94.     Bonds  of  Foreign  and  Domestic  Corporations. 
Stock  of  Domestic  Corporation. 

Bonds  issued  by  domestic  corporations  and  bonds  is- 


68 

sued  by  foreign  corporations,  owned  by  a  nonresident  of 
the  State  of  New  York  at  the  time  of  death,  which  said 
bonds  were  held  in  the  State  of  New  York  at  such  time, 
are  taxable  under  the  Transfer  Tax  Law  of  1892.  Mat- 
ter of  Whiting,  150  N.  Y.  27 ;  Matter  of  Morgan,  150  N. 
Y.35. 

Stock  of  a  domestic  corporation  owned  by  a  nonresi- 
dent at  the  time  of  death,  the  certificates  of  which  were 
on  deposit  in  the  State  of  New  York  at  such  time,  are 
taxable  under  the  Transfer  Tax  Law  of  1892.  Matter  of 
Whiting,  150  N.  Y.  27. 


95.     United  States  Bonds— Stock  of  Foreign  Cor- 
porations. 

Not  taxable.    Matter  of  Whiting,  150  N.  Y.  27. 


96.  Bonds— Foreign— IVhen  Taxable. 

Bonds  of  foreign  corporations  situate  within  the  State 
of  New  York  at  the  time  of  the  death  of  a  nonresident 
owner  are  taxable  under  the  Transfer  Tax  Act  of  1892. 
Matter  of  James,  144  N.  Y.  6. 

97.  United  States  Bonds — Wlien  Not  Taxable. 

The  Surrogate  Court  following  the  decision  in  Mutter 
of  Gihhes,  84  App.  Div.  (N.  Y.)  510,  held  in  an  appraise- 
ment of  the  estate  of  a  nonresident  of  the  State  of  New 
York,  under  the  Laws  of  1885  as  amended  in  1887  and 
1891,  that  United  States  bonds  held  within  the  State  at 
the  time  of  the  death  of  said  nonresident  owner,  were  not 
taxable.  Matter  of  Schermerhorn,  50  Misc.  Rep.  (N.  Y.) 
233. 


69 

98.  Bonds  and  Stock  of  Domestic  Corporations 
Owned  by  Non-Resident  and  Situate  "Witli- 
out  the  State. 

Decedent  died  testate  domiciled  in  the  State  of  Connec- 
ticut in  1893,  and  by  his  will  the  residuary  estate  passed 
to  his  two  sons,  residents  of  that  state.  A  part  of  the 
residuary  estate  consisted  of  shares  of  capital  stock  and 
bonds  of  corporations  incorporated  under  the  laws  of  the 
State  of  New  York,  all  of  which  were  in  testator's  posses- 
sion at  his  domicile.  The  comptroller  of  New  York 
claimed  that  both  by  the  terms  of  Chap.  399,  Laws  1892, 
and  by  force  of  the  statutory  construction  law  and  upon 
the  theory  these  bonds  and  shares  represent  interests  in 
corporations  incorporated  under  the  laws  of  New  York, 
they  were,  although  not  physically  within  the  State,  prop- 
erly assessed  by  the  surrogate  for  the  purpose  of  taxa- 

aa- 

tion.    The  court  held ; 

**The  important  words  to  be  noticed  in  the  law 
with  reference  to  the  matter  at  issue  in  the  case  of  a 
nonresident  are  ^property  within  the  State'.  Their 
importance  is  evident;  and  in  this  connection  refer- 
ence may  be  had  to  Section  22  of  the  Transfer  Act  of 
1892  which  defines  the  word  ^property'  as  used  in  the 
act,  as  meaning  all  property  or  interests  therein 
*over  which  this,  state  has  any  jurisdiction  for  the 
purposes  of  taxation'.  In  the  endeavor  to  ascertain 
the  intention  of  the  Legislature,  with  reference  to 
what  should  be  assessable  for  purposes  of  taxation 
as  property  under  this  act,  we  need  go  no  further 
than  the  act  itself,  which,  in  imposing  the  tax,  under- 
takes, in  addition,  to  give  a  definition  to  property, 
the  transfer  of  which,  by  will  or  by  the  intestate  laws 
of  the  State  creates  the  liability  to  taxation.  It  seems 
unimportant  to  consider  that  section  of  the  Statu- 
tory Construction  Law  which  gives  a  definition  to  the 
term  *  personal  property'  (Ch.  677,  L.  1892,  Sec.  4) ; 
if  indeed  applicable.  The  Act  contains,  within  itself 
a  complete  system  for  the  taxation  of  transfers  of 


70 

property  in  cases  of  testacy  and  intestacy,  and  also 
controlling  definitions  for  such  words  used  in  its  sec- 
tions as,  in  the  judgment  of  the  Legislature,  might 
seem  to  require  definition.  Whatever  may  be  argued 
in  support  of  the  right  to  subject  the  bonds,  of  a  do- 
mestic corporation  to  appraisement  for  taxation, 
when  physically  within  the  state,  upon  some  theory 
that  they  are  something  more  than  evidences  of  a 
debt  and  constitute  a  peculiar  species  of  property 
within  the  recognition  of  the  law,  as  well  as  within 
the  business  community,  such  argument  is  unavail- 
ing in  this  case,  where  the  bonds  themselves  were  at 
their  owner's  foreign  domicile.  They  did  not  repre- 
sent *  property  within  the  State*  in  any  conceivable 
sense.  What  property  they  represented  consisted  in 
the  debt  of  their  maker  and  that  species  of  property, 
unquestionably  must  be  considered  to  be  *  as  a  chose 
in  action',  the  holder's  and  owner's  and  to  be  insep- 
arable from  his  personalty.  *  *  *  To  call  debts, 
property  of  the  debtors  is  simply  to  misuse  terms. 
All  of  the  property  there  can  be  in  the  nature  of 
things,  in  debts  of  corporations  belongs  to  the  cred- 
itors, to  whom  they  are  payable  and  follow  their 
domicile  wherever  that  may  be.  Their  debts  have 
no  locality  separate  from  the  parties  to  whom  they 
are  due.  But  with  reference  to  shares  of  capital 
stock  owned  by  decedent  I  think  we  are  compelled  to 
differ  with  the  Appellate  Division.  The  attitude  of 
a  holder  of  shares  of  capital  stock  is  quite  other  than 
that  of  a  holder  of  bonds,  towards  the  corporation 
which  issued  them.  While  the  bondholders  are  sim- 
ply creditors  whose  concern  with  the  corporation  is 
limited  to  the  fulfillment  of  its  particular  obligation, 
the  shareholders  are  persons  interested  in  the  oper- 
ation of  the  corporate  property  and  franchises  and 
their  shares  actually  represent  undivided  interests 
in  the  corporate  enterprise.  The  corporation  has 
the  legal  title  to  all  the  properties  acquired  and  ap- 
purtenant ;  but  it  holds  them  for  the  pecuniary  bene- 
fit of  those  persons  who  hold  the  capital  stock ;  they 
appoint  the  persons  to  manage  its  affairs ;  they  have 
the  right  to  share  in  surplus  earnings  and  after  dis- 
solution they  have  the  right  to  have  the  assets  re- 


71 

duced  to  money  and  to  have  them  ratably  distrib- 
uted. Each  share  represents  a  distinct  interest  in 
the  whole  of  the  corporate  property.  As  said  in  Jer- 
main  v.  L.  S,  S  M.  S.  R.  R.  Co,  (91  N.  Y.  492)  it/ rep- 
resents the  interest  which  the  shareholder  has  in  the 
capital  and  net  earnings  of  the  corporation ' ;  or,  as 
Parke,  B.,  put  it,  in  Bradley  v.  Holdsworth,  (3  M.  & 
W.  p.  424)  it  is  *a  right  to  have  a  share  of  the  net 
produce  of  all  the  property  of  the  company'.^  Corpo- 
rate shares  mus.t  be  regarded  as  property  within  the 
broad  meaning  of  that  term.  Certificates  of  stock  in 
the  hands  of  their  holder  represent  the  number  of 
shares  which  the  corporation  acknowledges  he  is  en- 
titled to.  In  legal  contemplation  the  property  of  the 
shareholder  is  either  where  the  corporation  exists  or 
at  his  domicile;  accordingly  as  it  is  considered  to 
consist  in  his  contractual  rights,,  or  in  his  proprie- 
tary interest  in  the  corporation.  Hence,  it  cannot  be 
said  that  the  State  is  without  jurisdiction  over  the 
shares  of  stock  for  taxation  purposes,  for,  as  we 
have  said  in  Re  Enston,  113  N.  Y.  181,  re  James,  144 
N.  Y.  12,  that  a  share  of  stock  has  its  legal  situs, 
either  where  the  corporation  exists  or  at  the  holder's 
domicile.  Although  a  chose  in  action  must  necessa- 
rily follow  the  shareholder's  person,  that  does  not 
exclude  the  idea  that  the  property,  as  to  which  the 
right  relates  and  which  is,  in  effect,  a  distinct  inter- 
est in  the  corporate  property,  is.  not  within  the  juris- 
diction of  the  State  for  the  purpose  of  assessment 
upon  its  transfer  through  the  operation  of  any  law 
or  of  the  act  of  its  owner" 

Vann,  J.,  dissented  from  this  opinion  on  the  ground 
that  the  bonds  were  subject  to  the  jurisdiction  as  repre- 
senting property  in  the  State  of  New  York  and  therefore 
taxable.    Matter  of  Bronson,  150  N.  Y.  1. 

99.  Bonds  Held  Out  of  New  York  Secured  by 
Mortgage  on  Land  in  New  York — Not  Tax- 
able. 

Mary  Preston  died  a  resident  of  New  Jersey  in  April, 


72 

1900,  possessed  of  29  bonds  and  mortgages,  secured  by 
real  estate  in  tbe  County  of  Kings,  New  York.  The 
bonds  and  mortgages  were  actually  in  the  State  of  New 
Jersey  at  the  time  of  decedent's  death.  It  was  contended 
by  the  comptroller  in  a  New  York  Inheritance  Tax  ap- 
praisement that  said  bonds  and  mortgages  represented 
property  in  the  State  of  New  York  for  the  purpoae  of 
taxation.  The  Court  following  Matter  of  Bronson,  150 
N.  Y.,  held  the  bonds  and  mortgages  not  taxable.  Matter 
of  Preston,  78  N.  Y.  S.  91. 

100.  Notes  Secured  by  Mortgage. 

Notes  situated  in  a  safe  deposit  box  within  the  State  of 
New  York,  owned  by  a  nonresident  of  said  State,  when 
said  notes  were  secured  by  mortgage  on  real  estate  situ- 
ated without  the  State  of  New  York,  are  personal  prop- 
erty within  the  State  of  New  York,  as  defined  by  the  stat- 
utory Construction  Law  (Consolidated  Laws  1909,  Chap- 
ter 22,  Section  39),  and  are  taxable  under  the  Transfer 
Tax  Law  of  said  State.  The  fact  that  said  notes  may  be 
executed  by  a  nonresident  is  immaterial.  {Matter  of 
Whiting,  150  N.  Y.  27 ;  44  N.  E.  715 ;  34  L.  E.  A.  232 ;  55 
Am.  St.  Rep.  640.)  Re  Tiffany's  Estate,  128  N.  Y.  S. 
106. 

101.  Notes — When   Situate   at  Domicile   of  Non- 

Resident  of  Massachusetts,  but  Secured  by 
Real  Estate  Therein. 

When  the  owner  of  a  note  or  notes  secured  by  mort- 
gages upon  real  estate  in  Massachusetts,  dies  a  nonresi- 
dent of  that  state  with  the  notes  in  his  possession  at  his 
domicile,  said  notes  have  a  situs  for  taxation  in  the  State 
where  the  land  is  situate.  The  decision  of  the  Court  is, 
in  part : 


73 

**Iii  construing  the  scope  of  St.  1907,  C.  563,  Sec. 
1,  as  amended  by  St.  1909,  C.  268  and  by  St.  1909, 
C.  527,  Sec.  1,  which  provides  *  that  all  property  with- 
in the  jurisdiction  of  the  commonwealth,  corporal  or 
incorporal,  and  any  interest  therein,  whether  be- 
longing to  inhabitants  of  the  commonwealth  or  not.' 
For  general  purposes  the  interest  of  the  mortgagee 
is  treated  as  personal  property;  it  has  a  local  situs 
and  carries  with  it  an  ownership  of  the  land  until  it 
is  redeemed  by  the  payment  of  the  debt  in  perform- 
ance of  the  condition.  The  debt,  which  is  the  obliga- 
tion of  the  debtor  to  pay,  and  the  land  which  is  the 
security  for  payment  of  the  debt,  are  individual 
parts  of  a  single  valuable  property  in  the  mortgagee, 
which  may  be  made  available  in  different  ways.  The 
debt  belongs  with  the  mortgage  and  it  must  co-exist 
to  give  the  mortgage  validity.  For  that  purpose  it 
has,  a  situs  within  the  jurisdiction  of  the  State  where 
the  land  lies.  It  was  held  in  McCurdy  v.  McCurdy, 
197  Mass.  248;  83  N.  E.  (Mass.)  881;  16  L.  R.  A.  (N. 
S.)  329;  that  the  tax  upon  the  succession  to  real  es- 
tate in  this  commonwealth,  which  belonged  to  a  dece- 
dent in  another  state  and  was  subject  to  a  mortgage, 
was  to  be  assessed  only  upon  the  value  of  the  prop- 
erty above  the  mortgage.  This  was  upon  the  ground 
that  what  pas.sed  upon  the  death  of  the  mortgagor 
was  only  the  value  of  his  interest,  which  was  the 
value  of  the  real  estate  less  the  amount  of  the  debt 
that  was  a  charge  upon  it.  This  was  equivalent  to 
holding  that  upon  the  death  of  the  mortgagee,  his  in- 
terest in  the  real  estate  to  the  amount  of  his  debt 
would  pass  in  succession  to  his  representatives..  The 
same  doctrine  has  been  held  in  states  where  the  mort- 
gage was  only  a  lien  upon  real  estate.  It  is  the  law 
of  the  Supreme  Court  of  the  United  States.  Sav- 
ings S  Loan  Society  v.  Multnomah  County^  169  U.  S. 
421 ;  18  Sup.  Ct.  392 ;  Bristol  v.  Washington  County, 
111  U.  S.  133.  It  is  also  established  by  well-reasoned 
opinions  in  courts  of  several  states.  Allen  v.  No- 
tional  State  Bank,  92  Md.  509 ;  48  Atl.  78 ;  52  L.  R.  A. 
760;  84  Am.  St.  Rep.  517;  In  re  Merriam's  Estate, 
147  Mich.  630;  111  N.  Y.  196;  9  L.  R.  A.  1104;  118 
Am.  St.  Rep.  561;  Be  Bogers  Est,,  149  Mich.  305; 


74 

112  N.  W.  931 ;  11  L.  E.  A.  (N.  S.)  1134;  119  Am.  St. 
Eep.  677.  The  fact  that  the  laws  of  the  state  and 
the  jurisdiction  of  its  courts  must  be  invoked  for 
preservation  and  enforcement  of  rights  under  the 
mortgage  is  an  important  consideration  leading  to 
this  result.  *  *  *  There  is  strong  ground  for 
the  respondent's  contention  that  because  the  debts  in 
all  these  cases  could  only  be  enforced  in  the  ordinary 
way  against  the  debtor  by  the  use  of  our  courts,  we 
ought  to  hold  they  are  property  within  the  jurisdic- 
tion of  the  commonwealth  and  subject  to  taxation 
under  this  statute.  See  Blackstone  v.  Miller,  188  U. 
S.  189;  Matter  of  Daly,  100  App.  Div.  (N.  Y.)  373; 
91  N.  Y.  S.  858;  aif'd  182  N.  Y.  524''.  Kinney  v. 
Stevens,  93  N.  E.  586. 

102.  Property  Taxable  in  Two  States — Money  De- 
posited in  Nevsr  York — Depositor  Resident 
of  Illinois. 

Decedent  Blacks.tone  died  testate  domiciled  in  Illinois 
possessed  of  a  deposit  of  money  exceeding  $4,000,000.00 
in  a  Trust  Company  of  New  York.  This  deposit  had 
been  carried  in  said  Trust  Company  for  about  fourteen 
months  immediately  preceding  and  up  to  the  death  of  de- 
cedent and  was  subjected  to  a  tax  in  an  appraisement  in 
the  State  of  Illinois,  and  also  in  an  appraisement  in  the 
State  of  New  York.  Among  other  questions  presented 
to  the  Supreme  Court  of  the  United  States  was.  that  of 
so-called  double  taxation.  The  Court  held  that  the  suc- 
cession to  such  deposit  was  taxable  in  both  states,  and 
said  in  part : 

*  ^  The  property  was  delayed  within  the  jurisdiction 
of  New  York  an  indefinite  time,  which  had  lasted  for 
more  than  a  year,  so  that  this  finding  at  least  was 
justified.  Kelly  v.  Rhoads,  188  U.  S.  1,  ante,  359,  23 
Sup.  Ct.  Eep.  259.  Both  parties  agreed  with  the 
plain  words  of  the  law  that  the  tax  is  a  tax  upon  the 
transfer,  not  upon  the  deposit,  and  we  need  spend 


75 

no  time  upon  that.  Therefore  the  naked  question  is, 
whether  the  state  has  a  right  to  tax  the  transfer  of 
such  deposit  by  will.  *  *  *  *  Tj^^  answer  is 
somewhat  obscured  by  the  superficial  fact  that  New 
York,  like  most  other  states,  recognizes  the  law  of 
the  domicile  as  the  law  determining  the  right  of  uni- 
versal succession.  The  domicile,  naturally  must  con- 
trol a  succession  of  that  kind.  Universal  succession 
is  the  artificial  continuance  of  the  person  of  a  de- 
ceased by  an  executor,  heir,  or  the  like,  so  far  as  suc- 
cession to  rights  and  obligations  is  concerned.  It  is 
a  fiction,  the  historical  origin  of  which  is.  familiar  to 
scholars,  and  it  is  this  fiction  that  gives  whatever 
meaning  it  has  to  the  saying  mobilia  sequuntur  per- 
sonam. But  being  a  fiction  it  is  not  allowed  to  ob- 
scure the  facts  when  the  facts  become  important.'' 
Blackstone  v.  Miller,  188  U.  S.  189. 

103.  Money — Deposited   in   New   York   State    for 

Nearly  Tivo  Months— Taxable. 

The  succession  to  money  of  a  nonresident  deposited  in 
the  State  of  New  York  for  nearly  two  months  before 
the  death  of  depositor  is  taxable;  the  objection  to  such 
tax  on  the  ground  that  it  was  temporarily  in  the  State 
for  investment  is  not  tenable.  {BlacJcstone  v.  Miller, 
188  U.  S.  189.)    Re  Myer's  Estate,  129  N.  Y.  S.  194. 

104.  Money  of  Non-Resident  Decedent  on  Deposit 

in  New  York — Trust  Account. 

Houdayer  died  intestate  a  resident  of  New  Jersey  in 
May,  1895.  In  1876  he  opened  an  account  with  a  trust 
company  in  the  City  of  New  York  as  trustee  under  the 
will  of  Edward  Husson,  deceased,  in  which  he  also  made 
deposits  from  time  to  time  of  moneys  belonging  to  him- 
self. This  continued  as  an  open  account  until  his  death 
when  the  balance  on  hand  was  $73,000.00,  of  which  $2,- 
000.00  belonged  to  him  as  trustee,  and  the  remainder  to 
himself  individually.    The  Appraiser  taxed  the  individ- 


76 

ual  moneys.  The  Court  held:  ^' While  distribution  of 
the  fund  belongs  to  the  State  where  the  decedent  was 
domiciled,  as  such  distribution  cannot  be  made  until  his 
administrator  comes  into  this  State  to  get  the  fund,  pos- 
sibly after  resorting  to  the  Courts  for  aid  in  reducing 
it  to  possession,  the  fund  has  a  situs  here  because  it  is 
subject  to  our  law^'.  Appraiser's  finding  sustained. 
Matter  of  Houdayer,  150  N.  Y.  37. 

105.     Notes  Secured  by  Mortgage  Taxable  in  Mich- 
igan. 

Notes  secured  by  a  mortgage  upon  Michigan  real  es- 
tate, when  said  notes,  were  in  the  actual  possession  of 
the  nonresident  owner  at  the  time  of  death,  are  subject 
to  the  succession  tax  under  Act  No.  195,  Pub.  Acts  1903 
(Mich.)  on  the  ground  that  the  collection  can  be  enforced 
only  by  invoking  the  laws  of  Michigan,  and  further  that 
the  administration  laws  of  Michigan  must  be  called  to 
aid  the  collection.    The  Court  says: 

*  ^  The  estate  of  Mr.  Eogers  cannot  be  property  ad- 
ministered and  closed  without  ancillary  letters  of 
administration  obtained  under  the  laws  of  this  state. 
In  this  connection,  the  language  used  by  Justice 
Holmes  in  Blackstone  v.  Miller,  supra,  is  pertinent. 
We  quote : 

'If  the  transfer  of  the  deposit  necessarily  depends 
upon  and  involves  the  law  of  New  York  for  its  exer- 
cise, or,  in  other  words,  if  the  transfer  is  subject 
to  the  power  of  the  State  of  New  York,  then  New 
York  may  subject  the  transfer  to  a  tax.  United 
States  V.  Perkins,  163  U.  S.  625,  628,  629;  McCut- 
loch  V.  Maryland,  4  Wheat.  (U.  S.)  316,  429.  But  it 
is  plain  that  the  transfer  does  not  depend  upon  the 
law  of  New  York,  not  because  of  any  theoretical 
speculation  concerning  the  whereabouts  of  the  debt, 
but  because  of  the  practical  fact  of  its  power  over 
the  person  of  the  debtor.  The  principle  has  been 
recognized  by  this  Court  with   regard   to    garnish- 


77 

ments  of  a  domestic  debtor  of  an  absent  defendant. 
Chicago,  etc.,  R.  Co.  v.  Sturm,  174  U.  S.  710.  See 
Wyman  v.  Halstead,  109  U.  S.  654.  What  gives  the 
debt  validity?  Nothing  but  the  fact  that  the  law 
of  the  place  where  the  debtor  is  will  make  him  pay. 
It  does  not  matter  that  the  law  would  not  need  to 
be  invoked  in  the  particular  case.  Most  of  ns  do  not 
commit  crimes,  yet  we  nevertheless  are  subject  to 
the  criminal  law,  and  it  affords  one  of  the  motives 
for  our  conduct.  So,  again,  what  enables  any  other 
than  the  very  creditor  in  proper  person  to  collect 
the  debt?  The  law  of  the  same  place.  To  test  it, 
suppose  that  New  York  should  turn  back  the  cur- 
rent of  legislation  and  extend  to  debts  the  rule  still 
applied  to  slander  actio  personalis  moritur  cwm  per- 
sona,  and  should  provide  that  all  debts  hereafter 
contracted  in  New  York  and  payable  there  should  be 
extinguished  by  the  death  of  either  party.  Leaving 
constitutional  considerations  on  one  side,  it  is  plain 
that  the  right  of  the  foreign  creditor  would  be  gone. 
Power  over  the  person  of  the  debtor  confers  juris- 
diction, we  repeat;  and,  this  being  so,  we  perceive 
no  better  reason  for  denying  the  rights  of  New  York 
to  impose  a  succession  tax  on  debts  owed  by  its  citi- 
zens than  upon  tangible  chattels  found  within  the 
State  at  he  time  of  the  death.  The  maxim  'mohilia 
sequwntur  personam^  has  no  more  truth  in  the  one 
case  than  in  the  other.  When  logic  and  the  policy  of 
a  state  conflict  with  a  fiction  due  to  historical  tradi- 
tion, the  fiction  must  give  way.'  '*  Re  Rogers,  149 
Mich.  305. 


106.     Notes    Secnred    by    Mortgage    on    Ijands    in 
Michigan  Subject  to  Taxation. 

A  note  secured  by  mortgage  on  lands  in  the  State  of 
Michigan,  when  the  note  was  located  without  that  state 
in  the  possession  of  nonresident  owner  at  death,  is.  sub- 
ject to  a  succession  tax  under  the  Michigan  laws.  In  re 
Merriam  Estate,  147  Mich.  630.  Re  Stanton's  Estate, 
142  Mich.  491. 


78 


107.     Land  Contracts. 


When  a  nonresident  of  the  State  of  Michigan  dies  the 
owner  of  contracts  for  the  sale  of  lands  in  the  State  of 
Michigan  and  said  contracts  are  not  within  the  State  of 
Michigan  at  the  time  of  the  death,  said  contracts,  are  tax- 
able under  the  Michigan  laws  at  their  market  value.  Re 
Rogers  Estate,  149  Mich.  305 ;  Re  Stanton,  142  Mich.  491. 

108.  Non-Resident— Capital  Invested  in  Business 
in  New  York — Stock  Exchange  Member- 
ship Taxable. 

*^The  single  question  to  be  determined  upon  this 
appeal  is  whether  a  seat  or  membership  in  the  New 
York  Stock  Exchange  of  a  nonresident  of  this  State 
is  taxable  under  the  law  in  relation  to  taxable  trans- 
fers. This  depends  entirely  upon  whether  such  a 
seat  in  the  New  York  Stock  Exchange  is  to  be  con- 
sidered as  personal  property.  *  *  *  (Although) 
a  seat  in  the  New  York  Stock  Exchange  is  not  per- 
sonal property  under  the  restricted  definition  of  the 
Tax  Law  (Laws  of  1896,  Chap.  908,  Par.  2,  Subd.  5, 
as  amended  by  Laws  of  1901,  Chap.  490),  yet  it  is 
undoubtedly  capital  invested  in  business  in  this 
State  which  has  a  market  value  and  can  be  bought 
and  sold.  If  it  is  capital  invested  in  business  in  this, 
state,  it  is  property,  as  it  is  difficult  to  see  how  capi- 
tal invested  in  business,  which  has  a  market  value 
and  can  be  bought  and  sold,  does  not  fall  within  the 
term  property'.  The  restrictions  under  which  this, 
property  is  held  in  no  way  affect  its  character.  They 
may  detract  or  add  to  its  value.  As  was  said  by  Mr. 
Justice  Vann  in  the  opinion  in  the  case  cited :  ^  The 
money  used  by  him  to  buy  his  seat  was  neither 
thrown  away  nor  given  away,  but  was  paid  for  prop- 
erty of  great  value,  which  was  the  main  instrumen- 
tality for  carrying  on  the  business  in  which  he  was. 
engaged.  It  is  difficult  for  me  to  see  what  was  done 
with  the  money  unless  it  was  invested'.  These  ex- 
pressions of  the  learned  judge   clearly  show  that 


79 

what  was  bought  was  property ;  and  it  appears  that 
it  can  be  sold  and  is  of  great  value. 

We  think,  under  these  circumstances,  that  the  de- 
cree of  the  surrogate  was  right  and  should  be  af- 
firmed, with  costs '\  Matter  of  Glendinning,  6S 
App.  Div.  (N.  Y.)  125. 

109.  Partnersliip  Property. 

When  not  taxable.  See  succession  of  Stauffer,  119 
La.  66. 

110.  Partnersliip— Assets  in  New  York  and  Illi- 

nois. 

So  much  of  the  assets  of  a  partnership  kept  in  New 
York  of  a  firm  which  does  business  both  in  New  York 
and  Illinois,  are  taxable  under  the  laws  of  New  York. 
Matter  of  King,  30  Misc.  Eep.  (N.  Y.)  575. 

111.  Non-Resident  Decedent  Possessed  of  Legacy 

in  "Nevfr  York  Estate. 

Elizabeth  Fogg  died  a  resident  of  New  York  in  Janu- 
ary, 1801,  and  devised  her  residuary  estate  equally  to 
two  persons,  one  of  whom  was  John  M.  Phipps  of  Bos- 
ton, Massachusetts.  Phipps  died  in  January,  1892,  at 
his  home  in  Boston,  leaving  a  will  which  was  admitted 
to  probate  in  that  state.  A  copy  of  the  will  was  ad- 
mitted to  probate  in  the  County  of  New  York  and  an- 
cillary letters  issued.  In  an  appraisement  of  the  Fogg 
estate  a  tax  was  fixed  on  the  legacy  to  Phipps,  which 
was  paid  by  the  executors  of  her  estate.  The  legacy  to 
Phipps  was  never  paid  to  him,  he  having  died  before 
Mrs.  Fogg's  estate  was  settled.  By  the  will  of  Phipps 
his  estate  passed  to  his  widow.  Held,  that  Phipp's  in- 
terest in  the  Fogg  estate  passing  to  his  widow  was  a 
mere  chose  in  action — a  right  to  claim  a  share  of  a 


80 

residuary  estate,  but  consisting  of  no  particular  proper- 
ty, nor  any  particular  sum,  and  therefore  not  taxable 
in  the  State  of  New  York.    Re  Phipps,  77  Hun  325. 


112.     Share  of  Resident  Decedent  in  Undistributed 
Foreig^n  Assets. 

Decedent  Thomas  died  a  resident  of  the  State  of  New 
York.  Among  the  assets  of  her  estate  was  a  distribu- 
tive share  in  the  estate  of  a  deceased  sister  who  died 
a  resident  of  the  City  of  Cleveland,  State  of  Ohio,  no 
part  of  which  distributive  share  had  come  into  posses- 
sion of  decedent  prior  to  death,  aside  from  some  cer- 
tificates of  stock.  Held,  such  distributive  share  not  tax- 
able.   Matter  of  Thomas,  3  Misc.  Rep.  (N.  Y.)  388. 


113.     Deceased   Non-Resident's  Interest  in  Resi- 
dent Decedent's  Estate. 

Robert  T.  Clinch  died  a  resident  of  Paris,  France,  en- 
titled to  a  distributive  share  in  the  residuary  estate  of 
his  father,  Charles  J.  Clinch,  who  died  a  resident  of 
New  York.  No  question  was  raised  as  to  the  tax  on 
the  succession  of  Robert  to  the  share  in  his  father's  es- 
tate, but  question  was  raised  that  Robert 's  undistributed 
share  passing  by  his  will  was  taxable  under  the  laws  of 
New  York.  The  Court  held,  that  under  the  doctrine  an- 
nounced in  the  Blackstone  case  (Blackstone  v.  Miller, 
supra),  that  the  legatees  of  Robert  were  taxable.  Mat- 
ter of  PUpps,  11  Hun  325,  aff'd  143  N.  Y.  641,  as  well 
as  Matter  of  Zeflta,  167  N.  Y.  280,  were  cited,  but  the 
Court  based  its  ruling  on  the  four  cases  in  the  150th  New 
York,  viz:  Bronson,  Whiting,  Morgan  and  Houdayer. 
Matter  of  Clinch,  180  N.  Y.  300. 


81 

114.     Non-Resident  Decedent  a  Beneficiary  in  Un- 
liquidated Assets  Within  the  State. 

Edward  C.  Lord  died  testate,  a  resident  of  New  Jer- 
sey, in  January,  1892.  By  his  will  he  bequeathed  his  in- 
dividual property  to  his  wife,  who  was  also  a  resident  of 
New  Jersey.  One  of  the  questions  arising  in  this  case 
was,  whether  the  succession  of  legatees  under  the  will  of 
Emily  M.  Lord,  a  resident  of  New  Jersey,  and  widow  of 
the  decedent,  who  died  before  the  distribution  of  the  es- 
tate of  Edward  C.  Lord,  was  taxable.  Edward  C.  Lord 
had  maintained  a  safe  deposit  box  in  New  York  con- 
taining securities  of  the  approximate  value  of  $144,000.00, 
which  had  passed  to  Emily  M.  Lord,  by  the  death  of 
decedent.  The  Court  held,  citing  the  cases  of  Re  Phipps, 
77  Hun  325  and  Matter  of  Zefita,  167  N.  Y.  280,  that  the 
beneficiaries  under  Emily  M.  Lord's  will  to  her  undis- 
tributed share  in  her  husband's  estate,  were  not  taxable. 
Matter  of  Lord,  111  App.  Div.  (N.  Y.)  152. 

115.     Credits  of  Non-Resident  in  Taxing  State^- 
When  Taxable. 

D.  died  testate  a  resident  of  Montana  on  November 
12th,  1900.  At  the  time  of  the  death  testator  was  the 
owner  of  considerable  personal  property  situate  in  the 
State  of  New  York,  consisting  of  a  lease  on  real  estate 
and  deposits  in  banks.  In  an  appraisement  proceeding 
appealed  to  the  Appellate  Division  the  question  arose 
as  to  the  taxation  of  two  items,  as  follows :  Li  Septem- 
ber, 1899,  testator  loaned  one  R.  ($2,000,000.00;  Novem- 
ber 1st,  1900,  there  was  due  on  this  debt  $1,300,000.00. 
B.  desired  at  that  time  to  discharge  the  whole  debt  and 
had  rendered  a  statement  to  D.  showing  the  balance  re- 
maining due  and  unpaid.  On  that  date  D.  was  in- 
capacitated and  so  remained  until  his  death.     On  said 


82 

November  1st,  E.  drew  his  check  for  the  total  balance 
due  D.,  said  check  bearing  date  on  that  day  and  deliv- 
ered the  same  to  his  Secretary  with  instructions  to  use 
it  to  discharge  the  debt.  Seven  days  thereafter  the 
check  was  delivered  to  D  's  Secretary  who  took  the  same 
to  the  National  City  Bank  of  New  York  and  deposited  it 
to  D's  account.  The  bank  refused  to  receive  the  check 
for  deposit  in  the  general  account  of  D.  but  did  receive 
same  and  opened  a  special  account  with  D.  for  the 
amount  of  the  check.  The  Secretary  endorsed  the  check 
**Speci  a/c'\  This  transaction  was  effected  November 
7th,  1900,  and  remained  unchanged  for  the  next  five  days 
when  D.  died. 

The  other  item  involved  the  sum  of  $263,000.00  which 
was  money  on  deposit  with  a  firm  of  bankers  in  New 
York.  This  deposit  was  made  to  margin  stock  transac- 
tions, and  the  stock  purchased  from  said  fund  had  been 
closed  out  and  this  sum  was  held  for  D.  pursuant  to  di- 
rection. The  Court,  holding  both  deposits  to  be  debts 
due  D.,  said:  **We  think  its  rule  (referring  to  the 
Blackstone  case,  supra),  must  obtain  and  so  obtaining  it 
necessarily  follows  that  debts  due  within  this  State  from 
solvent  debtors,  which  are  converted  into  money  there- 
in, and  must  of  necessity  be  enforced  in  this  jurisdiction, 
or  not  at  all,  become  property  within  the  meaning  of 
the  Transfer  Tax  Law  and  as  such  are  taxable.''  Mat- 
ter of  Daly,  100  App.  Div.  (N.  Y.)  373. 

116.  Tax  Paid  to  United  States  Under  Federal 
Inheritance  Tax  "Lajv  and  Tax  Paid  to  the 
State  of  Montana  Does  Not  Affect  Taxation 
in  the  State  of  New  York. 

Matter  of  Daly,  100  App.  Div.  (N.  Y.)  373. 


83 


117.     Non-Resident — When    Property    in    Taxing 
State  is  Equaled  by  Indebtedness. 

Decedent  died  a  non-resident  of  the  State  of  New 
York  leaving  property  in  that  State  which  was  subject 
to  an  indebtedness  to  creditors  resident  of  the  same 
State  in  excess  of  testator's  property  therein.  The 
Conrt  held : 

^^The  tax  being  on  the  transfer  of  the  property 
of  the  decedent  within  the  State  and  being  imposed 
when  a  person  or  corporation  becomes  beneficially 
entitled  to  the  property,  it  is  only  the  property  to 
which  a  beneficiary  becomes  entitled  upon  which  a 
tax  is  imposed  and  it  would  seem  to  follow  that 
when  the  debts  of  the  decedent,  due  to  creditors  re- 
siding within  this  State  equal  or  exceed  the  de- 
cedent's property  within  this  State,  that  there  is 
no  transfer  of  property  upon  which  a  tax  is  im- 
posed. In  other  words,  what  was  taxable  was  the 
property  of  the  testator  within  this  State  which 
was  in  excess  of  the  amount  of  the  debts  of  the  tes- 
tator to  creditors  who  were  residents  of  this  State 
with  the  payment  of  which  this  property  was  pri- 
marily chargeable.''  Matter  of  Grosvenor,  124  App. 
Div.  (N.  Y.)  331. 


118.     Insurance — Domestic  Policy  on  Life  of  Non- 
Resident  Not  Taxable. 

Decedent  died  a  resident  of  New  Jersey  owning  a 
policy  of  insurance  issued  by  a  life  insurance  company 
organized  under  the  State  of  New  York.  It  was  con- 
tended by  the  comptroller  for  the  State  of  New  York, 
citing  Blackstone  v.  Miller,  188  U.  S.  189,  Re  Houdayer, 
150  N.  Y.  37;  Re  Clinch,  180  N.  Y.  300,  that  such  insur- 
ance was  taxable  in  the  State  of  New  York.  The  Court 
held,  the  insurance  not  taxable.  Re  Gordon,  186  N.  Y. 
471. 


84 

119.  Insurance—- Domestic  Policies  on  liife  of  Non- 

Resident  Not  Taxable. 

Policies  of  insurance  issued  by  a  life  insurance  com- 
pany organized  under  the  laws  of  the  State  of  New  York 
upon  life  of  a  non-resident  of  said  State  are  not  taxable 
in  the  State  of  New  York.  The  contention  of  the  comp- 
troller that  they  are  taxable,  on  the  ground  that  said 
corporations  are  creatures  of  the  State  laws  and  that 
the  State  has  limited  the  right  to  take  property  out  of 
the  state,  and  that  the  State  has  made  itself  a  beneficiary 
and  creditor  of  decedent,  which  fixes  a  lien  on  such  in- 
surance at  the  moment  of  the  death  of  said  insured,  and 
that  the  policies  are  not  essential  to  the  insurance,  nor 
the  jurisdiction  of  the  surrogate,  is  not  tenable.  Mat- 
ter of  Abhett,  29  Misc.  Eep.  (N.  Y.)  567. 

120.  Contract   for   Sale    of   Land    in    Nebraska-^ 

Oivner  a  Resident  of  Neixr  York. 

A  contract  for  sale  of  Nebraska  real  estate,  said  con- 
tract being  executed  by  a  resident  of  the  State  of  New 
York  retained  in  his  possession  until  death,  is  not  sub- 
ject to  the  Inheritance  Tax  Laws  of  the  State  of  Ne- 
braska.   Dodge  County  v.  Burns,  131  N.  W.  (Neb.)  922. 

121.  Non-Resident   Estate — Distribution    by    Ex- 

ecutors Cannot  Avoid  Taxation. 

Executors  of  a  non-resident  estate  cannot  make  such 
a  distribution  in  the  way  of  payment  of  debts  and  lega- 
cies so  as  to  avoid  or  lessen  a  tax.  Kingsbury  v.  Chapin, 
82  N.  E.  (Mass.)  700. 

122.  Non-Resident   Estate— Distribution    by   Ad- 

ministrator Cannot  Avoid  Taxation.     Pro- 
portion of  Indebtedness  Deductible. 

E.  died  intestate  a  resident  of  Massachusetts.     His 


85 

personal  estate,  amounting  to  about  $72,000.00  was  all 
outside  tlie  State  of  New  York,  except  a  few  shares  of 
stock  in  two  New  York  corporations  of  the  value  of 
about  $6,400.00.  An  Appraiser  developed  the  evidence 
that  the  total  indebtedness  of  the  entire  estate  equalled 
$12,000,  and  accordingly  allowed  9%  deduction  from  the 
property  taxable  in  New  York.  This  resulted  in  a  tax 
on  certain  nieces  and  nephews  at  the  rate  of  5%.  On  a 
motion  to  vacate  the  order  of  the  surrogate  the  adminis- 
trator contended  that  he  had  elected  to  apply  all  of  the 
property  in  New  York  to  the  payment  of  debts,  which 
election,  if  effected,  would  avoid  the  tax  in  New  York. 
Held,  that  the  nieces  and  nephews  became  vested  of  their 
interests  as  of  the  time  of  the  death,  and  that  the  elec- 
tion of  the  administrator  would  not  be  recognized.  Sur- 
rogate's order  affirmed.  Matter  of  Eamsdill,  190  N.  Y. 
492. 

123.  Distribution    of   Property   of   Non-Resident 

Cannot  Reduce  Tax — Fro  Rata  Distribu- 
tion. 

A  foreign  executor  cannot  make  an  arbitrary  distri- 
bution of  property  in  the  way  of  payment  of  debts  and 
satisfaction  of  legacies  so  as  to  reduce  the  Inheritance 
Tax.  Property  in  the  State  of  Iowa  belonging  to  a  non- 
resident may  be  distributed  pro  rata  in  payment  of 
legacies  and  bequests.  Wieting  v.  Morrow,  132  N.  W. 
(la.)  193. 

124.  Non-Residents— Property    in    Taxing    State 

Fro  Rated  for  Taxation.      Executors  Can 
Not  Distribute  So  as  to  Reduce  Tax. 

Chapter  310,  Laws  1908  (N.  Y.)  provide  that  the  prop- 
erty of  a  non-resident  decedent  not  specifically  be- 
queathed shall  be  transferred  proportionally  for  taxa- 


86 

tion  and  divided  pro  rata  among  the  general  legatees 
named  in  decedent  ^s  will,  including  transfers  under 
residuary  clause.  A  decedent  died  a  resident  of  Con- 
necticut possessed  of  securities  situate  in  the  State  of 
New  York.  Executor  filed  affidavits  showing  that  he 
had  elected  to  apply  the  securities  in  the  payment  of 
legacies  created  in  Article  II  of  the  will,  but  the  Ap- 
praiser divided  the  property  in  New  York  pro  rata 
among  all  the  legatees  in  the  will.  Held,  that  the  prop- 
erty should  be  pro  rated  for  taxation  and  the  election  of 
the  executor  was  refused  as  a  basis  of  distribution.  Re 
Porter's  estate,  124  N.  Y.  S.  676. 

125.  Paragraph  3,  Section  1.     Wlien  the  transfer 

is  of  property  made  by  a  resident,  or  by  a 
non-resident,  ivhen  such  non-resident's 
property  is  within  this  state,  by  deed, 
grant,  bargain,  sale  or  gift,  made  in  con- 
templation of  the  death  of  the  grantor, 
vendor  or  donor,  or  intended  to  take  effect 
in  possession  or  enjoyment  at  or  after  such 
death.  When  any  such  person,  institu- 
tion or  corporation  becomes  beneficially 
entitled  in  possession  or  expectancy  to  any 
property  or  the  income  therefrom,  by  any 
such  transfer,  whether  made  before  op 
after  the  passage  of  this  act. 

126.  Transfer  in  Contemplation  of  Death. 

Decedent  died  testate,  a  resident  of  Cook  County,  on 
September  1st,  1902.  Thirty-three  days  before  his  death 
he  gave  to  his  widow  property  of  the  value  of  $150,000.00. 
Decedent  at  the  time  of  death  was  fifty-one  years  of 
age,  well  educated  and  widely  read.  He  had  been 
troubled  for  several  years  with  what  was  supposed  to 
be  a  rheumatic  difficulty,  causing  a  pain  in  his  shoulder. 


87 

for  which  he  was  occasionally  treated,  but  his  appear- 
ance was  that  of  a  vigorous,  active  man.  On  July  7th, 
1902,  symptoms  developed,  indicating  spinal  disease. 
His  family  was  then  absent  from  Chicago,  and  *^it  was 
decided  he  should  take  a  trip  on  the  lake.  He  did  so, 
but  returned  on  July  17th,  much  worse,  with  aggravated 
symptoms  *  *  *.''  On  July  20th,  a  consultation  of 
physicians  was  had.  Examination  at  that  time  showed 
a  pressure  on  the  spinal  column,  probably  due  to  some 
malignant  growth.  When  he  came  back  from  the  boat 
trip  his  phyisicians  advised  him  to  write  for  his  wife, 
knowing  he  would  be  confined  to  his  bed  and  ^*  would 
want  his  family  near  him''.  She  returned  on  July  20th, 
the  day  of  the  consultation,  and  at  that  time  his  phy- 
sicians knew  he  would  die  sooner  or  later  from  the  di- 
sease. He  did  not  go  to  business  after  his  return  and 
after  July  20th  was  confined  to  his  bed.  On  July  25th, 
he  was  able  to  stand  on  his  feet  and  use  his  limbs  with 
the  greatest  difficulty,  and  the  physicians  had  become 
convinced  that  the  disease  would  be  fatal. 

On  July  28th,  while  his  attorney  was  present,  the  gift 
in  question  was  made,  and  his  will  was  prepared  and 
executed  on  July  31st.  His  physician  did  not  tell  him 
he  was  going  to  die.  He  did  not  ask  the  physicians  what 
was  the  matter  with  him,  and  the  physicians  did  not  tell 
him.  He  talked  about  going  abroad  to  recuperate  and 
said  nothing  about  his  death.  The  disease,  which  was  a 
malignant  growth,  progressed  rapidly  until  his  death  on 
September  1st,  1902.    The  Court  held : 

**The  question  is,  whether  the  gift  of  $150,000.00 
was  made  by  decedent  in  contemplation  of  his  death 
within  the  meaning  of  the  law.  The  argument  for 
appellant  is  largely  devoted  to  the  question  whether 
the  gift  was  made  inter  vivos  or  a  gift  causa  mortis, 
and  counsel  contend  that  it  was  an  absolute  gift 


88 

inter  vivos,  and  that  there  was  no  evidence  of  an 
intent  to  defraud  the  state  of  an  inheritance  tax  and 
for  these  reasons,  it  was  not  subject  to  the  tax. 
They  rely  upon  decisions  in  New  York,  where  the 
courts,  in  construing  a  similar  statute,  appear  to 
have  considered  it  important  to  determine  whether 
the  gift  be  inter  vivos  or  causa  mortis,  and  have 
held  that  if  it  was  causa  mortis,  the  property  would 
be  subject  to  the  tax;  but  if  it  was  inter  vivos  the 
property  transferred  would  not  be  taxable  unless 
made  by  the  donor  and  received  by  the  donee  for 
the  purpose  and  with  the  intention  of  evading  the 
Inheritance  Tax  and  defrauding  the  State.  There 
is  no  presumption  that  a  person  intends  to  commit 
fraud  and  under  these  decisions  it  must  be  proved 
that  a  gift  inter  vivos  was  made  in  contemplation  of 
impending  death  and  was  made  and  received  for  the 
purpose  of  defrauding  the  State.  We  do  not  re- 
gard  it  as  necessary  to  classify  gifts  in  that  way  in 
order  to  interpret  or  give  effect  to  the  language  of 
our  statute  *  *  *.  Gifts  causa  mortis  would  be 
within  the  statute,  that  is,  a  gift  by  one  who  antici- 
pates death  as  being  near,  made  in  view  of  his  death 
and  to  take  effect  by  that  event.  *  *  *  The  stat- 
ute, however,  embraces  all  gifts  made  in  con- 
templation of  death  and  the  language  does  not 
naturally  or  necessarily  involve  a  fraudulent  intent. 
A  gift  is  made  in  contemplation  of  an  event  when 
it  is  made  in  expectation  of  that  event  and  having  it 
in  view,  and  a  gift  made  when  the  donor  is  looking 
forward  to  his  death  as  impending,  and  in  view  of 
that  event,  is  within  the  language  of  the  statute. 
With  that  understanding  of  the  law  there  is  no  doubt 
that  the  gift  in  this  case  was  made  in  contempla- 
tion of  death.  The  preparation  of  the  will  under 
the  circumstances  and  in  view  of  the  rapid  progress 
of  the  disease  is  strong  evidence  that  death  was  ex- 
pected and  no  other  moving  cause  than  the  expecta- 
tion of  death  is  apparent".  Rosenthal  v.  The 
People,  211  111.  306. 


89 

127.     Transfer  in  Contemplation  of  Death. 

Decedent  died  a  resident  of  Ottawa,  Illinois,  on  April 
25tli,  1903.  At  the  time  of  his  death  he  was  about  sixty- 
five  years  of  age,  and  had  np  to  a  few  months  prior  to 
said  decease,  been  actively  engaged  in  business  and  had 
accumulated  a  fortune.  For  a  period  of  eight  or  ten 
years  prior  to  his  death  he  had  been  afflicted.  In  the 
month  of  April,  1903,  under  the  advice  of  his  physician, 
he  determined  to  submit  to  a  surgical  operation.  On  the 
13th  of  that  month  he  went  to  a  hospital  in  Chicago,  and 
on  the  same  day  an  operation  was  performed,  from  the 
effect  of  which  he  died  two  days  thereafter.  Before  his 
departure  for  Chicago  on  April  10th,  by  conveyance  and 
assignment  absolute  in  form,  he  conveyed  and  assigned 
all  his  property,  both  real  and  personal,  with  the  excep- 
tion of  two  life  insurance  policies,  to  his  wife.  The 
Court  held : 

**It  is  urged  that  the  stipulation  found  in  the 
record  to  the  effect  that  the  transfers  to  Mrs.  Merri- 
field,  etc.,  were  absolute,  and  that  they  were  accepted 
by  them,  that  they  entered  into  possession  and  own- 
ership of  the  property  transferred  to  them,  respec- 
tively, and  that  after  said  transfers  were  executed 
decedent  had  no  interest  in  said  property  and  that 
said  transfers  were  gifts  inter  vivos  and  not  gifts 
causa  mortis,  and  that  the  title  to  property  vested 
in  said  donees  during  the  life  of  decedent,  and  that 
the  donees  are  not  liable  to  pay  an  inheritance  tax 
for  that  reason.  In  the  eye  of  the  law,  the  transfers 
may  have  been  absolute  and  yet  have  been  made  by 
decedent  in  contemplation  of  death.  In  other  words, 
a  gift  inter  vivos,  if  made  in  contemplation  of  the 
death  of  the  donor,  will  subject  the  donee  to  a  tax, 
while  if  made  not  in  contemplation  of  death,  it  would 
not." 

Held,  the  transfer  to  be  made  in  contemplation  of 
death.    Merrifield  v.  The  People,  212  111.  400. 


90 

128.     Transfer  in  Contemplation  of  Death.      Act 
Imposing  Tax  Constitutional. 

A  resident  of  Chicago  died  July  26th,  1902,  having 
reached  the  age  of  75  years.  In  March,  1902,  decedent 
gave  to  his  brother  950  shares  of  stock.  On  the  20th  day 
of  Jnne,  1902,  certificates  of  stock,  evidencing  1000 
shares  in  the  Pine  Land  Company  and  of  the  value  of 
about  $100,000.00  were  transferred  upon  the  books  of 
said  corporation  to  Dr.  Ward  (his  son-in-law  and  phy- 
sician), as  trustee  for  the  use  and  benefit  of  Harriet 
Stevens  Ward,  granddaughter  of  decedent.  Decedent's 
health  had  been  declining  for  some  months  before  his 
death.  He  was  suffering  from  Bright 's  disease  of  the 
kidneys  and  hardening  of  the  arteries.  The  evidence 
shows  decedent  was  able  to  be  out  of  the  house  and  to 
attend  to  a  portion  of  his  business  during  the  spring  and 
early  summer  before  his  death.  On  June  14th,  Doctor 
Ward  held  a  consultation  with  another  physician  who 
testified  that  decedent  had  Bright 's  disease  and  hard- 
ening of  the  arteries,  from  which  he  was  much  enfeebled. 
On  June  23rd,  the  physicians  discovered  that  there  was 
also  a  degeneration  of  the  kidneys  and  decedent  had  an 
enlarged  heart.  The  physician  testified  he  saw  the 
patient  again  on  the  25th  of  June  and  again  on  July  3rd, 
8th,  15th  and  21st.  On  July  14th,  it  was  discovered  de- 
cedent was  suffering  from  deterioration  of  the  blood  ves- 
sels and  there  was  an  enlargement  of  the  aorta.  On 
July  26th  decedent  died  from  a  rupture  of  the  enlarged 
aorta  produced  by  vomiting.  It  was  contended  by  at- 
torney for  the  executor  that  Section  1  of  the  Inheritance 
Tax  Law  of  1895  was  unconstitutional  on  the  ground 
that  it  impairs  the  obligation  of  a  contract  when  it  is  di- 
rected to  apply  to  gifts  inter  vivos.  The  Court  held  the 
Act  constitutional  and  further,  that  the  facts  disclosed 


91 

a  condition  from  which  it  must  be  concluded  decedent 
contemplated  death  at  the  time  of  the  transfer  to  Har- 
riet S.  Ward,  beneficiary  of  the  trust.  The  question  of 
taxation  of  the  gift  to  the  brother  did  not  arise  as  a 
tax  was  collected  on  the  ground  that  said  transfer  to  the 
brother  was  made  to  take  effect  at  or  after  death  and 
said  question  did  not  go  to  the  Supreme  Court.  Estate 
of  Benton,  234  111.  366. 

129.     Transfer — "When    Not   in    Contemplation    of 
Death. 

K.  and  wife  did,  on  March  1st,  1900,  execute  to  the 
Illinois  Trust  &  Savings  Bank  of  Chicago,  a  trust  deed 
transferring  real  estate  of  the  approximate  value  of 
$260,000.00.  The  deed  was  delivered  on  March  13th, 
1900.  K.  executed  his  will  on  June  20th,  1900,  and  at 
that  time  was  about  sixty-nine  years  of  age  and  had 
been,  prior  to  his  death,  engaged  in  business  in  Chicago. 
He  had  been  troubled  with  valvular  disease  of  the  heart 
for  many  years  and  was  confined  to  his  house  from  an 
attack  of  heart  disease  at  the  time  he  executed  said  trust 
deed.  His  family  physician  testified  decedent  was  sub- 
ject to  such  attacks  for  many  years;  that  they  were 
brought  on  by  over  exertion ;  that  he  had  theretofore  re- 
covered from  same  and  there  was  no  apprehension  of 
Mr.  K^s  immediate  death  at  the  time  the  deed  was  ex- 
ecuted. K.  recovered  his  usual  health  shortly  after  the 
deed  was  executed  and  remained  in  said  condition  until 
the  following  September  (six  months)  when  he  was 
again  taken  sick  and  died  on  October  25th,  1900.  The 
Court  said  on  the  question  of  contemplation  of  death 
that  the  record  did  not  disclose  any  evidence  or  tend  to 
show  that  decedent  thought  that  he  was  about  to  die  at 


92 

tlie  time  he  executed  said  trust  deed,  or  that  he  made 

said  trust  deed  in  contemplation  of  his  death. 

*^It  is  not  the  object  of  the  statute  to  prevent  a 
parent  from  giving  the  whole  or  any  portion  of  his 
property  to  his  children  during  his  lifetime,  if  he  so 
desires;  the  only  effect  of  the  statute  as  a  revenue 
measure  is  to  subject  said  property  to  an  Inherit- 
ance Tax  if  the  gift  is  made  in  contemplation  of 
death  of  the  donor.  In  Rosenthal  v.  The  People, 
211  111.  306  and  Merrifield  v.  The  People,  211  id. 
400,  the  evidence  showed  clearly  that  both  Eosen- 
thal  and  Merrifield  were  about  to  die  at  the  time 
they  made  the  transfers  there  considered,  and  that 
transfers  of  the  bulk  of  their  estates  were  made  to 
their  immediate  descendants  as  a  disposition  of 
their  respective  estates  in  contemplation  of  death, 
which  they  each  knew  was  almost  immediately  likely 
to  follow  and  which  did  follow  the  making  of  the 
transfers,  within  a  few  days'*.  People  v.  Kelly,  218 
m.  509. 

130.  Transfer  to  Take  Effect  After  Death— A 
Writing  Not  Necessary  to  Evidence  Reten- 
tion of  Income. 

Robert  Moir  died  December  19th,  1901.  His  residence 
was  adjudicated  to  have  been  in  Illinois.  On  June  1st, 
1898,  decedent  executed  a  deed  for  the  consideration  of 
One  Hundred  Dollars  and  good  and  other  valuable  con- 
sideration to  his  three  sons,  purporting  to  convey  to 
them  all  of  his  real  estate  situate  in  Warren  and  Hen- 
derson Counties,  Illinois,  excepting  a  homestead,  which 
deed  was  acknowledged  February  26th,  1899,  recorded 
in  Henderson  County,  March  25th,  and  in  Warren  Coun- 
ty, March  27th,  1902.  On  the  same  day  the  deed  bears 
date  the  decedent  gave  to  each  of  his  sons  $200,000.00 
in  personal  property,  and  at  the  same  time  articles  of 
co-partnership  were  executed  between  the  decedent  and 
Mb  said  sons,  whereby  the  members  of  the  firm  were 


93 

each  to  put  into  the  business  $200,000,00,  and  said  firm 
was  to  succeed  to  the  banking  business  carried  on  by: 
said  decedent,  Robert  Moir.  Decedent  was  to  receive 
one-half  of  the  profits  of  the  business  and  the  other  one- 
half  was  to  be  divided  equally  among  his  three  sons. 
The  farms  owned  in  Warren  and  Henderson  Counties 
purported  to  have  been  conveyed  by  deed  had  been  rented 
by  decedent  prior  to  the  execution  to  a  number  of  ten- 
ants and  they  knew  of  no  change  in  the  ownership  of 
the  farms  prior  to  the  death  of  Moir  and  they  trans- 
acted business  connected  with  the  renting  of  said  farms 
and  payment  of  rent  with  said  Robert  Moir  after  the 
date  of  the  deed  and  in  the  same  way  as  they  had  done 
before  that  date.  The  sons  testified  the  land  was  not 
partnership  estate,  but  that  the  income  thereof,  as  it 
accrued,  was  carried  into  the  partnership  account,  and 
that  decedent  received  one-half  thereof  as  a  member  of 
said  firm  up  to  the  time  of  his  death.  The  Court  held 
that  it  was  not  necessary  for  the  deeds  themselves  to 
disclose  to  whom  the  income,  from  such  land  or  lands, 
was  payable,  and  that  the  one-half  of  the  real  estate  on 
which  the  income  and  rents  ultimately  reached  the  donor 
was  subject  to  the  Inheritance  Tax  Act  in  force  July 
1st,  1895.  The  Court  did  not  pass  upon  the  taxability 
of  the  personal  property  transferred  to  the  partnership. 
People  V.  Moir,  207  111.  180. 

131.     Transfer  to  Take  Effect  After  Death— When 
Taxable. 

One  David  Kelley  died  testate  a  resident  of  the  State 
of  Illinois,  on  October  25th,  A.  D.  1900.  On  March  1st, 
1900,  said  decedent  and  his  wife  executed  to  a  trust  com- 
pany in  Chicago  a  trust  deed  conveying  improved  real 
estate  in  Chicago,  of  the  value  of  $260,000.00,  which 


94 

yielded  an  animal  income  of  $14,500.  By  the  terms  of 
the  deed  the  net  annual  income  was  to  be  paid  quarterly 
in  equal  sums  to  the  two  sons  of  the  grantors  and  their 
heirs,  with  the  exception  of  $200  per  month,  which  was 
to  be  held  by  the  trustee  until  the  end  of  each  year,  when 
same  was  to  be  paid  to  the  grantors  or  survivors  of  them 
during  their  natural  lives,  if  they  requested  in  writing 
said  payment.  The  $200.00  per  month  provision  was  not 
paid  until  after  the  death  of  decedent,  but  since  that  time 
was  paid  to  the  widow.  On  stipulation  of  the  parties,  the 
County  Judge  fixed  $43,000.00  as  the  proportional  value 
of  the  $260,000.00  as  the  amount  necessary  to  produce 
$200.00  per  month  and  fixed  a  tax  upon  said  $43,000.00  as 
a  transfer  to  take  effect  at  or  after  death  under  Section 
1  of  the  Inheritance  Tax  Laws  of  Illinois,  in  force  July 
1st,  A.  D.  1895. 

It  was  held  that  although  there  was  an  absolute  trans- 
fer of  all  property  to  the  trust  company  in  trust,  yet  the 
retention  of  the  right  in  the  decedent  and  his  wife  to  re- 
ceive $200.00  per  month  from  the  property  transferred  in 
trust  was  a  transfer  to  take  effect  at  or  after  death,  with- 
in the  meaning  of  the  statute.  People  v.  Kelley,  218  111. 
509. 

132.     Transfer   Prior  to   Death— "When   Not   Tax- 
able. 

One  Garwood  died  testate  February  17th,  1907,  a  resi- 
dent of  Illinois,  the  owner  of  real  and  personal  property 
of  the  value  of  about  $125,000.00.  A  few  years  before  his 
death  he  transferred  title  to  his  property  to  Anna  E. 
Burkhalter,  who  was  not  related  to  him  either  by  blood  or 
marriage.  An  Appraiser  appointed  under  the  Inheritance 
Tax  Law  assessed  a  tax  against  her  on  the  transfer  as 


95 

being  made  to  take  effect  at  or  after  death.  Garwood's 
wife  died  in  1897,  leaving  surviving  of  the  marriage  a 
daughter,  then  about  35  years  old,  who  was  unable  to 
speak  or  hear.  Burkhalter  had  lived  with  the  Garwood 
family  a  number  of  years  prior  to  decedent's  death  as  a 
companion  of  Miss  Garwood,  who,  by  reason  of  her  af- 
fliction, needed  a  constant  attendant.  After  Mrs.  Gar- 
wood's death  Miss  Burkhalter  remained  with  Miss  Gar- 
wood until  1901,  when  she  quit  that  service  and  was  mar- 
ried, declining  Mr.  Garwood's  offer  of  $40,000.00  if  she 
would  continue  there  and  not  get  married.  Thereafter 
through  the  mediation  of  Miss  Burkhalter's  brother,  she 
was  induced  to  undertake  the  care  of  decedent's  daughter 
and  remained  in  his  household  under  an  agreement  where- 
by, in  consideration  of  appellee  continuing  to  act  as  com- 
panion of  and  caring  for  decedent's  daughter  as  long  as 
the  latter  lived,  Mr.  Garwood  undertook  to  convey  and 
transfer  to  appellee  all  the  property  he  possessed.  Ap- 
pellee faithfully  performed  her  part  of  the  contract  until 
Miss  Garwood's  death  in  1904.  On  the  other  hand,  dece- 
dent performed  his  part  of  the  contract  by  assigning  to 
appellee  from  time  to  time  different  portions  of  his  prop- 
erty until  he  had  transferred  it  all  to  her,  the  last  trans- 
action being  a  few  weeks  before  his  daughter's  death. 
Miss  Burkhalter  at  once  took  possession  of  the  property 
so  transferred  to  her  and  leased  and  controlled  the  real 
estate,  and  had  the  actual  custody  of  the  stocks,  bonds, 
notes  and  deeds.    The  Court  held : 

**It  was  not  decedent's  impending  death  which  was 
the  impelling  motive  for  making  this  disposition  of 
his  property,  but  his  desire  to  provide  for  his  daugh- 
ter's future.  The  contemplation  of  death  must  be  the 
impelling  motive,  without  which  the  conveyance 
would  not  have  l3een  made  in  order  to  subject  a 
transfer  of  property  to  the  inheritance  tax. ' ' 


96 

Decedent  did  not  transfer  the  property  to  Ms  daughter 
or  in  trust  for  her;  ** instead  he  sold  it  in  consideration 
of  a  contract  for  her  care,  the  performance  of  which  be- 
gan and  was  completed  in  his  lifetime/*  Held,  that  the 
transfer  was  not  taxable.  People  v.  Burkhcdter,  247  HI. 
600. 

133.  Transfers  Prior  to  Death— WTien  Taxable. 

Nancy  Boone  transferred  to  her  sons  a  certain  tract  of 
land  '^for  and  in  consideration  of  the  love  and  affection 
that  I  have  for  my  sons,  and  the  further  consideration  of 
the  assistance  they  have  rendered  me  since  the  death  of 
my  husband.''  There  was  no  proof  of  the  character  of 
assistance  rendered  by  the  sons.  In  a  proceeding  to  as- 
sess a  tax  under  the  Federal  Inheritance  Tax  Law,  it  was 
held :  The  succession  tax  cannot  be  defeated  by  reciting 
a  nominal  consideration,  which  would  be  deemed  valua- 
ble in  the  technical  sense  of  that  term,  for  the  Act  of 
Congress  (under  which  this  proceeding  was  had),  says 
the  consideration  must  not  only  be  valuable  but  ade- 
quate. Held  taxable.  United  States  v.  Hart,  4  Fed.  Eep. 
292. 

134.  Transfers— To  Take  Effect  At  or  After  Death. 

John  W.  Masury  died  May  14th,  1895.  On  September 
14th,  1892,  he  executed  and  delivered  two  deeds  of  trust 
to  the  Brooklyn  Trust  Company  in  favor  of  John  M. 
Masury;  one  for  $81,000.00  and  the  other  for  $119,- 
000.00.  In  December,  1892,  John  W.  executed  and  de- 
livered a  deed  of  trust  in  favor  of  Frederick  M.  Masury, 
transferring  a  fund  of  $62,000.00  to  Brooklyn  Trust 
Company.  The  income  from  the  trusts  were  to  be  paid 
directly  to  John  M.  Masury  and  Frederick  M.  Masury. 


97 

On  March  lOth,  1890,  John  W.  executed  and  delivered 
a  deed  of  trust  to  the  Brooklyn  Trust  Company  in  an 
amount  of  $10,200.00,  providing  in  said  deed  that  the 
income  should  be  paid  to  said  John  W.,  grantor,  or  or- 
der, during  his  life  and  afterward  to  those  he  might 
designate  in  his  will,  or  to  his  children.  The  provision 
was  modified  July  19,  1892,  by  a  writing,  directing  the 
trustee  to  pay  to  John  M.  Masury  **all  net  income  aris- 
ing from  the  trust  fund  transferred  to  said  Company 
under  said  deeds  of  trust  until  this  authority  is  revoked 
by  me  in  writing.''  Each  deed  contained  a  reservation 
in  grantor  *Ho  revoke  and  annul  the  same  during  my 
lifetime.''  Held,  that  as  to  the  trust  deeds  of  1892,  the 
title  to  and  income  from  the  property  passed  from 
grantor;  that  the  reservation  in  grantor  to  revoke  did 
not  change  the  title,  and  would  not  until  exercised,  which 
it  never  was ;  that  said  transfers  were  not  made  to  **take 
effect  at  or  after  death."  As  to  the  deed  of  March  10th, 
1890,  the  reservation  of  the  income  brings  the  case  with- 
in the  rule  laid  down  in  Matter  of  Seaman,  147  N.  Y.  69. 

John  M.  Masury 's  rights  did  not  accrue  until  the 
death  of  John  W.  The  order  of  John  W.  to  trustee, 
dated  July  19th,  1892,  to  pay  the  income  to  John  M., 
did  not  change  the  legal  effect  of  the  instrument.  The 
income  was  paid  by  virtue  of  this  order  to  John  M.,  not 
because  of  any  rights  under  the  trust  deed  but  upon  the 
order  of  John  W.,  the  same  as  the  income  might  have 
been  directed  to  John  Smith  by  the  order  of  John  W. 
Surrogate's  decree  reversed  in  part  and  affirmed  in  part. 
Matter  of  Masury,  28  App.  Div.  (N.  Y.)  580.  Aff'd 
without  opinion,  159  N.  Y.  532. 


98 

135.  Transf eiv-To  Take  Effect  At  or  After  Death. 

Bostwick  executed  and  delivered  six  deeds  of  trust, 
naming  the  New  York  Life  Insurance  and  Trust  Com- 
pany, trustee,  and  providing  for  the  payment  of  part 
of  the  income  from  the  property  in  three  of  the  deeds 
to  his  sisters  and  reserving  to  himself  all  the  income,  or 
right  to  appoint  same,  in  the  fourth  deed.  The  other 
two  deeds  provided  an  income  to  his  daughters.  Grantor 
reserved  part  of  income  to  himself  in  the  three  deeds, 
all  of  the  income  in  the  fourth  deed;  and  none  of  the 
income,  nor  did  he  receive  any,  from  the  two  deeds  to 
his  daughters;  but  Bostwick  reserved  in  all  deeds  the 
right  to  alter,  amend  or  withdraw  any  portion  of  prop- 
erty and  terminate  the  trusts  at  any  time  during  his  life. 
The  Court  said: 

**It  requires  neither  argument  nor  authority  to 
demonstrate  that  a  tax  was  properly  imposed.  By 
the  instruments  Bostwick  did  not  in  fact  dispose  of 
the  property  at  all.  After  delivering  the  instru- 
ments to  trustee,  he  could  not  only  acquire  posses- 
sion of  the  property,  but  he  could  dispose  of  it  just 
as  effectually  as  ever.  The  trustee  was  little  more 
than  bailee  or  attorney.  (Matter  of  Masn^ry,  28 
App.  Div.  (N.  Y.)  580,  distinguished.)  The  reser- 
vation of  power  to  amend,  alter  or  terminate  the 
trust  indicated  the  intention  that  the  transfers  were 
not  to  take  effect  in  possession  or  enjoyment  until 
death.*'  Matter  of  Bostwick,  38  App.  Div.  (N.  Y.) 
223;  Aff'dieON.Y.  489. 

136.  Transfer  to  Take  Effect  at  Death. 

A  testator  died  November  15th,  1897.  On  January 
2nd,  1893,  he  transferred  to  his  four  daughters  eleven 
shares  of  stock.  On  the  same  day  the  daughters  exe- 
cuted to  said  Brandreth  an  instrument,  which  recited 
that  the  transfer  was  **upon  condition  that  he  (Brand- 


99 

reth)  is  to  receive  all  dividends  for  the  term  of  Ms  life 
and  also  upon  condition  that  he  has  the  right  to  vote  the 
stock  the  same  as  though  no  transfer  had  heen  made; 
that  this  agreement  is  not  revocable  by  any  of  the  par- 
ties.   The  Court  said: 

**  Though  the  remainder  may  vest  in  title  at  its 
creation,  it  cannot  vest  in  possession  until  the  de- 
termination of  the  prior  estate.  It  makes  no  differ- 
ence in  this  respect  whether  the  remainder  is  vested 
indefeasibly  or  is  contingent  or  subject  to  be  divest- 
ed. In  the  present  case  the  prior  estate  is  one  for 
the  life  of  the  donor,  and,  therefore,  the  remainder 
transferred  to  his  daughters  falls  exactly  within  the 
provision  of  the  statute  as  a  transfer  to  take  effect 
in  possession  or  enjoyment  on  the  death  of  the  do- 
nor.^' Eeversing  58  App.  Div.  (N.  Y.)  575;  Matter 
of  Brandreth,  169  N.  Y.  437. 

137.     Transfer — Intended  to  Take  Effect  at  Death 
of  Donor. 

Testatrix  died  a  resident  of  New  York,  May  21st, 
1893.  On  February  14th,  1889,  she  transferred  in  trust, 
by  deed,  property  exceeding  $200,000.00.  By  the  terms 
of  the  deed  in  trust  it  was  provided  that  the  donor  should 
have  the  use  of  the  income  during  her  life  and  after  her 
death  the  property  to  pass  to  her  nieces.  The  court 
held,  that  conceding  the  remainder  in  the  nieces  vested 
on  the  delivery  of  the  deed,  yet  the  real  question  was, 
whether  the  remainder,  which  the  nieces  took  under  the 
deed,  was  intended  to  **take  effect  in  possession  or  en- 
joyment at  or  after  the  death  of  the  donor.''  It  was 
determined  that  the  nieces  were  taxable  as  the  benefi- 
ciaries of  property  transferred  to  take  effect  in  posses- 
eion  or  enjoyment  at  or  after  the  death  of  the  donor. 
(Laws  1892  (N.  Y.),  Ch.  399,  Sec.  1.)  Matter  of  Greene, 
153  N.  Y.  223. 


100 


138.  Transfer  Prior  to  Death — ^Reservation  of  In- 

come by  Oral  Arrangement. 

A  transfer  of  property  absolute  on  its  face  when  ac- 
companied by  an  oral  arrangement  between  the  donor 
and  donee  that  the  donor  shall  have  the  income  from  the 
property  for  life,  is  taxable.  Matter  of  Cornell,  170  N.  Y. 
423,  modifying  Matter  of  Cornell,  66  App.  Div.  (N.  Y.) 
162. 

139.  Transfer  prior  to  Death — IVhen  Taxable. 

Decedent,  by  an  instrument  in  writing  dated  Septem- 
ber 13th,  1892,  transferred  to  trustees  personal  property 
of  the  value  of  $35,000.00,  on  the  condition  that  the  prin- 
cipal should  be  kept  invested  and  during  the  donor's  life 
to  pay  to  his  daughter,  Angele,  the  sum  of  $1,200.00  an- 
nually and  the  balance  of  the  income  to  the  donor.  At 
donor's,  death  to  pay  over  the  trust  fund  to  said  daughter, 
Angele,  or  to  such  persons  as  she  might  by  will  appoint, 
etc.  The  Court  held,  that  the  legal  title  to  the  property 
irrevocably  passed  from  grantor  to  the  trustees  at  the 
time  of  the  delivery  of  the  trust  instrument,  except  as  to 
a  possible  surplus  of  income.  Angele  took  a  vested  re- 
mainder subject  to  defeasance.  The  property  was  trans- 
ferred to  take  effect  in  possession  or  enjoyment  at  or 
after  the  death  of  the  donor.  Matter  of  Cruger,  54  App. 
Div.  (N.  Y.)  405. 

140.  Cases  in  "Wliich  Transfers  IVere   Held  Not 

Taxable. 

See  Re  BelVs  Estate,  130  N.  W.  (Iowa)  798.  Matter 
of  Hess,  110  App.  Div.  (N.  Y.)  476,  affirmed  187  N.  Y. 
554.    Matter  of  Thome,  60  N.  Y.  S.  419. 


101 

141.     Transfer — Intention  to  Defeat  the  Tax. 

An  intention  to  defeat  the  tax  by  a  transfer  in  the  life- 
time of  decedent  does  not  make  the  transfer  void.  The 
tax  is  not  defeated.  State  Street  Trust  Company  v. 
Stevens,  95  N.  E.  (Mass.)  851. 


1412.     Transfer — Taxation  Is  Imposed  at  Time  of 
Death  of  the  Grantor. 

Where  property  is  transferred  to  take  effect  at  or 
after  death,  the  time  of  the  taxable  transfer  is  deter- 
mined as  of  the  death  of  the  donor.  State  Street  Trust 
Company  v.  Stevens,  95  N.  E.  (Mass.)  851. 

143.  Transfer  by  Deed  Prior  to  Inheritance  Tax 

TtSLvr — When  Taxable. 

The  Transfer  Tax  Act  (N.  Y.)  of  1892,  Sec.  1,  does 
not  cover  remainders  which  take  effect  beneficially  in 
possession  at  the  death  of  the  life  tenant  who  died  while 
the  Act  of  1892  was  in  force,  when  said  life  tenant  and 
remaindermen  derive  their  title  from  the  will  of  a  tes- 
tator who  died  in  October,  1876.  Matter  of  Seaman,  147 
N.  Y.  69;  87  Hun  619.  According  to  the  syllabus  this 
case  decides  that  subdivision  3  of  Sec.  1,  Act  of  1892 
(N.  Y.),  upholds  a  tax  upon  property  or  the  transfer 
thereof  taking  effect  in  possession  and  enjoyment  in  1892 
under  a  deed  executed  and  delivered  prior  to  any  inherit- 
ance tax  legislation. 

144.  Other  Cases  "Wherein  the  Question  of  Tax  is 

Raised  on  Transfers  Prior  to  Death. 

In  Be  Maris  Estate,  50  Leg  Int.  458;  14  Pa.  Co.  Ct. 
Rep.  171;  3  Pa.  Dist.  K  33. 

Matter  of  Borup,  28  Misc.  Rep.  (N.  Y.)  474. 

Matter  of  Edwards,  85  Hun  436. 


102 

Matter  of  Johnson,  19  N.  Y.  Supp.  963. 
Matter  of  Sharer,  73  N.  Y.  Supp.  1057. 
Matter  of  Anthony,  82  N.  Y.  Supp.  789. 

Matter  of  Peters,  N.  Y.  Law  Journal,  March  25, 

1909. 
Matter  of  Reish  v.  Com,,  42  Leg.  Int.  102;  aff'd 

106  Pa.  St.  521. 

Seibert's  Appeal,  110  Pa.  St.  329,  1  Atl.  346. 

DuBois'  Appeal,  121  Pa.  St.  368,  15  Atl.  641. 

Davenport's  Appeal,  3  Pa.  Sup.  Ct.  Dig.  236. 

Wright's  Appeal,  38  Pa.  St.  507. 

In  re  Thomson's  Estate,  5  Wkly.  Notes  Cas.  19. 

Waugh's  Appeal,  78  Pa.  St.  436. 

1%  re  ConwelVs  Estate,  45  Leg.  Int.  266. 

Com.  V.  Kuhn,  2  Pa.  Co.  Ct.  E.  248. 

In  re  Lines'  Estate  (1893),  155  Pa.  St.  378,  26  Atl. 
728. 

In  re  Brewer's  Estate,  16  Pittsb.  Leg.  J.  114. 

Attorney  General  v.  Montifiore,  59  Law  T.  534. 

In  re  Micklewait,  11  Exch.  452. 

In  re  Johnson's  Estate  (Surr.),  19  N.  Y.  Supp. 
963. 


145.  Paragraph  4,  Section  1.  Whenever  any  per- 
son, institution  or  corporation  shall  exer- 
cise a  poiver  of  appointment  derived  from 
any  disposition  of  property  made  either 
before  or  after  the  passage  of  this  act,  such 
appointment,  ivhen  made,  shall  be  deemed 
a  taxable  transfer  under  the  provisions  of 
this  act,  in  the  same  manner  as  though 
the  property  to  -which  such  appointment 
relates  belonged  absolutely  to  the  donee  of 
such  poiver  and  had  been  bequeathed  or 
devised  by  such  donee  by  Tirill ;  and  -whenever 
any  person  or  corporation  possessing  such 
a  poiver  of  appointment  so  derived  shall 


>>:  I  . 


103 


omit  or  fail  to  exercise  the  same  ixrithin 
tlie  time  provided  therefor,  in  ivhole  or  in 
part,  a  transfer  taxable  under  the  provi- 
sions of  this  act  shall  be  deemed  to  take 
place  to  the  extent  of  such  omission  or 
failure,  in  the  same  manner  as  though  the 
persons  or  corporations  thereby  becoming 
entitled  to  the  possession  or  enjoyment  of 
the  property  to  ivhich  such  power  related 
had  succeeded  thereto  by  a  will  of  the 
donee  of  the  power  failing  to  exercise  such 
power,  taking  effect  at  the  time  of  such 
omission  or  failure. 


146.  Power  of  Appointment — ^Wlien  Created  by 
"Will  of  Decedent  "Who  Died  Prior  to  Tax 
Legislation — Real  Estate  Converted  Into 
Personalty  Before  Transfer. 

David  Dows,  Sr.,  died  March  SOtli,  1880,  a  resident  of 
the  State  of  New  York  (before  inheritance  tax  legisla- 
tion). Part  of  his  property  was  limited  in  trust  to  pay 
the  income  therefrom  to  his  son,  David  Dows,  Jr.,  during 
life,  **and  upon  the  death  of  my  son,  the  said  property, 
with  all  accumulations  of  interest,  income  and  profits, 
shall  vest  absolutely  and  at  once  in  such  of  his.  children 
him  surviving,  and  the  issue  of  his  deceased  children, 
as  he  may,  by  his  last  will  and  testament  designate  and 
appoint,  and  in  such  manner  and  upon  such  terms  as  he 
may  legally  impose.  But  in  case  my  said  s.on,  David 
Dows,  Jr.,  die  intestate,  then  said  property  with  all  ac- 
cumulations of  income,  etc.,  shall  vest  absolutely  and  at 
once  in  his  children  him  surviving,  share  and  share  alike, 
and  the  issue  of  his  deceased  children,  per  stirpes,  to  be 
paid  to  them  at  the  times  and  in  the  proportion  follow- 
ing, to-wit,  etc.*' 

A  similar  devise  was  made  of  a  share  of  testator's 


104 

residuary  estate.  The  trustees  had  power  of  sale  and 
exercised  the  same  within  the  lifetime  of  David  Dows, 
Jr.,  reducing  the  real  estate  to  personal  property  and 
investing  in  stocks  of  corporations. 

David  Dows,  Jr.,  died  January  13th,  1899,  testate,  and 
by  his  will  exercised  the  power  of  appointment  created 
in  him  by  the  will  of  his  father  in  favor  of  his  three  sonsu 
By  the  will  of  David  Dows,  Jr.,  he  gave  to  each  of  his 
sons  the  income  of  three  undivided  forty-eighths  until 
his  son  Eobert  attained  the  age  of  twenty-one  years  or 
sooner  died;  of  four  forty-eighths  until  Robert  attained 
the  age  of  twenty-five  years  or  sooner  died,  and  nine 
forty-eighths  until  Robert  attained  the  age  of  thirty 
years  or  sooner  died.  Thus,  each  son  was  given  the  in- 
come of  sixteen  forty-eighths  or  one-third  of  the  prop- 
erty. At  the  termination  of  these  life  estates  the  prin- 
cipal was  given  to  another  son,  that  is  to  say,  to  B  was 
given  the  principal  of  the  share,  the  income  of  which  A 
had  been  receiving ;  to  C  the  principal  of  what  had  been 
B's  share  and  to  A  the  principal  of  C's  share.  Each  son, 
instead  of  being  given  the  remainder  of  his  own  share, 
after  Robert  arrived  at  the  age  of  thirty  years,  is  given 
the  remainder  in  another  s,on's  share,  though  the  shares 
are  exactly  equal. 

The  surrogate  imposed  a  tax  on  the  property  passing 
under  this  power  of  appointment  both  on  the  life  estates 
and  on  the  remainders.  The  surrogate's  order  was  af- 
firmed by  the  Appellate  Division.  One  of  the  objections 
raised  to  the  order  was  that  the  tax  imposed  (under  the 
Transfer  Act  of  1896  as  amended  April  16th,  1897,  Ch. 
284),  upon  transfers  made  under  a  power  of  appoint- 
ment, is  a  tax  on  property  and  not  on  the  right  of  suc- 
cession, and  therefore  so  much  of  the  fund  as  is  invested 
in  incorporated  companies  was  exempt  from  taxation 


105 

by  tjie  general  statute  and  not  subject  to  the  Inheritance 
Tax.  The  Court  held,  citing  Matter  of  Vanderhilt,  163 
N.  Y.  597,  affirming  50  App.  Div.  (N.  Y.)  246,  that  the 
theory  upon  which  inheritance  taxation  is  based  is  up- 
held in  said  cases,  even  if  said  property  were  converted 
into  United  States  securities.  Matter  of  Swift,  137  N.  Y. 
77 ;  Matter  of  Sherman,  153  N.  Y.  1 ;  Magown  v.  Illinois 
Trust  (&  Savings  Bank,  170  U.  S.  283,  etc. 

The  second  objection  urged  was  that  at  the  time  of 
the  death  of  said  David  Dows,  Sr.,  the  property  was  real 
estate  on  which  there  was,  at  that  time,  no  transfer  tax 
as  against  lineal  descendants  of  the  testator.  The  Court 
held,  citing  Matter  of  Sutton,  3  App.  Div.  (N.  Y.)  208, 
affirmed  149  N.  Y.  618,  without  opinion,  that  the  actual 
form  in  which  the  property  existed  at  the  time  of  testa- 
tor's death  determined  its  liability  to  a  transfer  tax 
and  that,  being  real  estate,  it  was  exempt ;  that  the  same 
rule  governs  this  case,  but  that  at  the  time  of  the  execu- 
tion of  the  power  of  appointment  under  the  will  of  David 
Dows,  Sr.,  the  property  was  personal.  That  the  execu- 
tion of  the  power  effects  the  transfer  and  it  follows  that 
the  condition  or  form  of  the  property  at  the  time  of  such 
execution  must  control.  The  third  objection  was  that  the 
legatees  and  devisees  of  remainders  are  not  subject  to 
taxation  until  the  precedent  estates  terminate  and  the 
remainders  ves.t  in  possession.    The  Court  held: 

**  Practically  each  son  of  David  Dows,  Jr.,  is  be- 
queathed one-third  of  the  fund  absolutely  with  the 
time  of  enjoyment  in  possession  postponed.  What 
motive  dictated  the  curious  shifting  of  remainders 
found  in  the  will  of  David  Dows,  Jr.,  we  do  not  know, 
nor  is  it  necessary  that  we  speculate  thereon  *  *  *. 
Still,  under  the  statute  it  is  plain  they  are  presently 
taxable.  Subdivision  4,  Sec.  220  of  the  Tax  Act, 
amended  by  Chap.  284,  Laws  of  1897,  directs  the 


106 

tax  shall  be  imposed  ^wheii  any  sueli  person  or  cor- 
poration becomes  beneficially  entitled  in  possession 
or  expectancy.'  Section  222  of  the  same  laws  pro- 
vide all  taxes  shall  be  due  and  payable  at  the  time 
of  the  transfer,  and  that  a  tax  upon  the  transfer  of 
any  estate,  property  or  interest  therein  limited,  con- 
ditioned, dependent  or  determinable  upon  the  hap- 
pening of  any  contingency  or  future  event,  by  reason 
of  which  the  fair  market  value  thereof  cannot  be  as- 
certained at  the  time  of  the  transfer,  shall  accrue 
and  become  due  and  payable  when  the  persons  enti- 
tled thereto  come  into  actual  possession  or  enjoy- 
ment. That  all  of  the  property  passing  by  the  exe,- 
cution  of  the  power  of  David  Dows,  Jr.,  is  taxable  as 
of  the  date  of  the  execution  of  the  power.''  Matter 
of  Dows,  167  N.  Y.  227. 

147.     Power  of  Appointment — Transfer  is  Effected 
by  Exercise  of  Poiwer. 

By  the  eleventh  article  of  her  will  testatrix  devised  a 
certain  share  of  her  estate  in  trust,  to  hold  the  same 
for  L.  H.,  during  his  life,  the  income  from  said  trust  to 
be  paid  to  s.aid  L.  H.,  for  his  and  his  family's  use,  mainte- 
nance and  support.  The  limitation  in  trust  further  pro- 
vided that  upon  the  death  of  said  L.  H.,  the  trustee  should 
pay  over  the  trust  fund  to  such  person  or  persons  and  in 
such  manner  and  proportion  and  at  such  time  or  times 
as  the  said  L.  H.  should  specify  and  direct  by  his  last 
will  and  testament,  provided  such  testamentary  disposi- 
tion should  be  valid.  In  case  he  should  die  without  leav- 
ing a  will,  such  trust  fund  should  be  transferred  and  paid 
over  to  his  children  and  their  heirs.    The  Court  held : 

*  *  The  question  presented  by  this  appeal  is  whether 
the  learned  Surrogate  was  right  in  holding  that  this 
remainder  was  not  taxable  until  the  time  comes  for 
the  exercise  of  the  testamentary  power  of  appoint- 
ment conferred  upon  the  life  beneficiary. 

In  support  of  this  determination  the  executors 


107 

rely  upon  subdivision  5  of  Section  220  of  Chapter 
908,  L.  1896,  as  amended  by  Chapter  284,  L.  1897. 
This  subdivision,  so  far  as  applicable,  provides  as 
follows : 

^Whenever  any  person  or  corporation  shall  ex- 
ercise a  power  of  appointment  derived  from  any 
disposition  of  property  made  either  before  or  after 
the  passage  of  this  Act,  such  appointment  when 
made  shall  be  deemed  a  transfer  taxable  under 
the  provisions  of  this  Act  in  the  same  manner  as 
though  the  property  to  which  such  appointment  re- 
lates belonged  absolutely  to  the  donee  of  such 
power  and  had  been  bequeathed  or  devised  by 
such  donee  by  will.' 

In  construing  this  provision,  it  has  been  held  that 
it  is  the  exercise  of  the  power  of  appointment  and 
not  the  creation  of  that  power  which  affects  the 
transfer  which  the  statute  makes  taxable.  Matter 
of  Beaver,  63  App.  Div.  (N.  Y.)  283;  Matter  of  Wal- 
worth, 66  id.  171.  If  this  view  is  correct  and  the 
subdivision  quoted  is  applicable  to  the  11th  and  12th 
articles  (same  as  11th)  of  Mrs.  Howe's  will,  the 
order  under  review  would  clearly  appear  to  be  right. 

The  applicability  of  that  subdivision,  however,  is 
disputed  by  the  learned  counsel  for  the  appellant, 
who  insists  that  it  was  repealed  by  implication  by 
the  enactment  of  Chapter  76  of  the  Laws  of  1899, 
which  amended  Section  230  of  the  Tax  Law  (Laws 
of  1896,  Chap.  908)  by  inserting  therein,  among 
other  provisions,  the  following:  *When  property 
is  transferred  in  trust  or  otherwise,  and  the  rights, 
interest  or  estates  of  the  transferees  are  dependent 
upon  contingencies  or  conditions  whereby  they  may 
be  wholly  or  in  part  created,  defeated,  extended  or 
abridged,  a  tax  shall  be  imposed  upon  said  transfer 
at  the  highest  rate,  which,  on  the  happening  of  any 
of  the  said  contingencies  or  conditions,  would  be 
possible  under  the  provisions  of  this  article,  and 
such  tax  so  imposed  shall  be  due  and  payable  forth- 
with out  of  the  property  transferred.'  The  phrase- 
ology of  this  amendment  of  1899  is  not  such  as.  nec- 
essarily to  embrace  a  case  like  the  present,  where  a 


108 

testamentary  power  of  appointment  is  bestowed 
upon  the  life  beneficiary  of  a  trust.  While  here 
Leavitt  Howe  and  Edward  Howe  may  be  regarded 
as  the  original  transferees  of  the  shares  devised  and 
bequeathed  in  trust  for  their  benefit,  it  cannot  fairly 
be  said  that  their  rights,  interests,  or  estates  are  de- 
pendent upon  contingencies  or  conditions  whereby 
they  may  be  wholly  or  in  part  created,  defeated,  ex- 
tended or  abridged.  Their  right,  interest  and  estate 
in  the  share  or  money  set  apart  in  trust  for  each  is 
absolute  and  not  dependent  upon  any  contingency 
or  condition  whatever.  They  are  entitled  under  the 
will  to  the  proceeds  of  the  fund  left  in  trust  for  them 
during  the  whole  of  their  natural  lives.  It  would 
seem,  therefore,  that  their  estates  do  not  fall  within 
the  scope  of  the  amendment,  and  it  may  well  be 
doubted  whether  the  amendment  was  intended  to 
apply  at  all  to  cases,  where  a  life  estate  is  coupled 
with  a  testamentary  power  of  appointment  to  be 
exercised  at  its  conclusion.  It  is  to  be  observed  that 
the  amendatory  statute  (Laws  of  1899,  Chap.  76) 
makes  no  change  whatever  in  any  section  of  the  Tax 
Law,  except  Section  230.  It  leaves  unchanged  Sec- 
tion 220,  the  fifth  subdivision  of  which,  relating  to 
powers  of  appointment,  has  already  been  quoted. 
The  effect  of  the  amendment,  therefore,  was  the 
same  as  though  one  statute  had  been  enacted  con- 
taining subdivision  5  of  Section  220  and  Section  230 
as  changed  in  1899.  We  thus  have  in  contemplation 
of  law  an  act  of  the  Legislature  containing  specific 
directions  as  to  the  taxation  of  estates  in  regard  to 
which  a  power  of  appointment  is  conferred  upon 
the  original  transferee ;  and  I  do  not  see  how  it  can 
well  be  held  that  a  subsequent  provision  in  the  same 
statute  in  regard  to  the  taxation  of  transfers  of 
property,  where  the  estates  of  the  transferees  are 
dependent  upon  contingencies  or  conditions,  effects  a 
repeal  by  implication  of  the  specific  provision  relat- 
ing to  transfers  through  the  instrumentality  of  the 
donee  of  the  power. 

Neither  Matter  of  Vmderhilt  (172  N.  Y.  69)  nor 
Matter  of  Brez  {Id.  609)  bears  upon  the  question  in 
controversy  here.    Thos.e  decisions  relate  wholly  to 


109 

the  effect  of  Section  230  of  the  Tax  Law  (as  amd. 
by  Laws  of  1899,  Chap.  76)  and  the  opinions  contain 
nothing  in  conflict  with  the  views  which  have  been 
expressed/'  Matter  of  Howe,  86  App.  Div.  (N.  Y.) 
286,  affrmed  176  N.  Y.  570. 

148.  Power  of  Appointment  Created  by  "Will  of 
Testator  Who  Died  Prior  to  Tax  Legisla- 
tion. 

Vanderbilt  died  in  1885  and  by  his  will  created  a  trust 
fund  wherein  his  son  was  given  the  income  for  life  with 
power  to  appoint  said  sum  to  his  lawful  issue  in  such 
shares  as  by  will  directed.  Said  son  died  in  1899  and  by 
his  will  appointed  a  portion  of  the  fund  to  his  issue.  At 
the  time  of  the  death  of  Vanderbilt  the  succession  to  said 
fund  was  not  taxable  under  the  collateral  inheritance  tax 
law.  By  the  amendment  of  1897,  subdivision  5,  Section 
220,  it  was  provided  that  whenever  any  person  shall  ex- 
ercise a  power  of  appointment  derived  from  any  dis- 
position of  property,  made  either  before  or  after  the 
passage  of  the  amendment,  such  appointment  shall  be 
deemed  a  taxable  transfer.  The  Court  held :  That  the 
direct  object  of  the  amendment  of  1897  was  to  make  the 
time  at  which  the  appointee  of  the  power  became  enti- 
tled to  possession,  the  time  at  which  the  tax  should  be 
imposed.  That  the  collateral  inheritance  tax  law  of  1885 
did  not  constitute  a  contract  between  the  State  of  New 
York  and  Vanderbilt.  *^It  is  never  to  be  assumed  that 
the  State  has,  by  any  act,  fettered  its  power  of  taxation 
unless  it  appears  with  irresistible  clearness  otherwise." 
Matter  of  Vanderbilt,  50  App.  Div.  (N.  Y.)  246.  Affirmed 
163  N.  Y.  597,  on  opinion  below. 


110 

149.  Tax  on  Transfer  Effected  by  Power  Created 

Under  Will  Before  Tax  Legislation  Con- 
stitutional. 

One  Astor  conveyed  to  his  daughter,  Mrs.  Delano,  on 
September  30th,  1848,  a  house  and  lot  in  New  York  City. 
Said  deed  provided  that  Mrs.  Delano  should  have  the 
life  use  of  the  property,  and  upon  her  death  without 
is.sue  to  a  brother  and  sister,  or  their  issue,  etc.  The 
deed  further  conferred  upon  Mrs.  Delano  the  power  to 
appoint  the  property  to  her  brothers  and  sister,  or  their 
issue. 

On  September  6, 1849,  Astor  transferred,  in  trust,  cer- 
tificates of  the  public  debt  of  the  State  of  Ohio  amount- 
ing to  $50,000.00,  with  the  life  use  thereof  to  his  daughter, 
Mrs.  Delano,  and  power  of  appointment  in  her  to  desig- 
nate the  fund  by  will  to  her  brothers  and  sister.  Held, 
Section  220,  as  amended  in  1897,  a  proper  exercise  of 
legislative  power  and  that  the  property  appointed  by 
Mrs.  Delano,  who  died  tes.tate  in  1902,  was  taxable  ac- 
cording to  her  exercise  of  the  power  by  will.  *  *  The  right 
of  the  Legislature  to  impose  a  tax  on  the  privilege  of 
exercising  a  power  by  will  is  not  affected  by  the  fact  that 
no  such  tax  was  imposed  when  the  power  was  created.'' 
Matter  of  Delano,  176  N.  Y.  486. 

150.  Poxirer    of    Appointment  —  IVlien    Situs    of 

Property  Inimaterial. 

Caroline  C.  Hull  died  testate  in  January,  1874,  a  resi- 
dent of  the  State  of  New  York.  She  bequeathed  to  her 
son,  W.  J.  Hull,  the  income  of  four-thirteenths  of  her 
estate  during  his  life,  with  the  power  to  appoint  the 
principal  by  last  will  and  testament  or  other  instrument 
executed  by  him  ''m  the  presence  of  two  or  more  wit- 
nesses. ' ' 


Ill 

At  the  death  of  Caroline  C.  Hull  said  four-thirteenths 
of  her  estate  consisted  of  an  undivided  interest  in  real 
estate — ^*  belonging  to  her  father,  Eichard  M.  Cooper,  a 
resident  of  New  Jersey,  but  for  a  long  time  subsequent 
to  her  death  the  said  four-thirteenths  of  her  estate  had 
been  converted  into  cash  and  remained  in  that  form 
which  had  been  invested  in  bonds  and  mortgages  on  prop- 
erty in  New  Jersey/' 

W.  J.  Hull  died  a  resident  of  the  State  of  New  York, 
April  5th,  1902,  and  by  his  will  exercised  the  power  of  ap- 
pointment conferred  upon  him  by  the  will  of  his  mother, 
Caroline  C.  Hull,  appointing  said  fund  to  Ida  M.  Hull, 
his  wife.  Pursuant  to  the  power  of  appointment  the 
trustees  of  the  estate  of  Caroline  C.  Hull  paid  the  fund 
(which  was  in  Camden  County,  New  Jersey)  to  Ida  M. 
Hull,  between  the  9th  day  of  September,  1902,  and  the 
5th  day  of  May,  1904,  the  value  being  $26,537.00,  said 
payment  being  made  pursuant  to  the  exercise  of  the 
power  of  appointment.  An  appraiser  was  appointed  in 
the  State  of  New  York  and  on  his  report  the  surrogate 
found  the  fund  was.  taxable  against  Ida  M.  Hull.  On 
appeal  to  the  Surrogate  Court  of  Westchester  County 
the  surrogate's  order  of  tax  was  reversed.  In  an  appeal 
prosecuted  to  the  Appellate  Division  it  was  held : 

**We  are  of  the  opinion  that  the  learned  surrogate 
has  fallen  into  error  in  reversing  the  original  decree 
in  this  matter,  due  to  the  confusion  of  the  question 
of  an  entirely  irrelevant  detail  in  relation  to  the 
situs  of  the  property  which  passed  to  said  Ida  M. 
Hull,  The  question  is.  not,  where  the  property  was 
located  or  whether  it  was  real  or  personal  property, 
but  whether  the  beneficiary  came  into  its  possession 
through  the  exercise  of  a  privilege  conferred  by  the 
State  of  New  York.  The  Tax  Law  (L.  1896,  Ch. 
908,  Sec.  220,  Subd.  5,  as  amended  by  L.  1897,  Ch. 
284)  provides  *  whenever  any  person  or  corporation 


112 

shall  exercise  a  power  of  appointment  derived  from 
any  disposition  of  property  made  either  before  or 
after  the  passage  of  this  Act,  such  appointment  when 
made  shall  be  deemed  a  transfer  taxable  under  the 
provisions  of  this  Act,  etc.'  It  is  not  the  property 
which  is  the  subject  of  taxation;  it  is  the  right  or 
privilege  which  the  State  confers  upon  the  citizens 
of  this  State  to  dispose  of  property  by  will  *  *  *.» 
In  Matter  of  Bows,  167  N.  Y.  227,  231,  the  Court, 
after  calling  attention  to  certain  cases  decided  in  the 
United  States  Supreme  Court,  says:  *But  whatever 
may  be  the  technical  source  of  title  of  a  grantee  un- 
der a  power  of  appointment,  it  cannot  be  denied  that 
in  reality  and  substance  it  is  the  execution  of  the 
power  that  gives  to  the  grantee  the  property  passing 
under  if  *  *  *  {Matter  of  Lansing^  182  N.  Y. 
238-244,  and  authorities  cited  therein),  it  being  the 
privilege  upon  the  right  to  succession  of  property 
by  means  of  a  will  that  is  taxed;  and  the  subject  of 
the  litigation  being  within  the  jurisdiction  of  the 
State,  it  seems  clear  in  the  will  of  Caroline  C.  Hull, 
a  resident  of  this  State,  upon  the  exercise  of  that 
power  by  Wager  J.  Hull,  likewise  a  resident  of  this 
State,  is.  bound  to  pay  the  tax  imposed  upon  that 
privilege,  regardless  of  the  question  of  where  the 
property  to  which  the  power  related  was  located. 
Jda  M.  Hull  gets  all  her  rights  in  and  to  the  prop- 
erty by  reason  of  the  exercise  of  the  power,  a  priv- 
ilege granted  by  the  State  of  New  York.  *  *  *  " 
Matter  of  Hull,  111  App.  Div.  (N.  Y.)  322. 

151.  Tax  on  Transfer  Effected  by  Exercise  of  a 
Power  Created  Prior  to  Tax  iLegislation 
Constitutional. 

The  Supreme  Court  of  the  United  States,  in  an  opinion 
reviewing  Matter  of  Delano,  176  N.  Y.  486,  said  in  part: 
**  However  technically  correct  it  may  be  to  say  that  the 
estate  came  from  the  donor,  and  not  from  the  donee  of 
a  power,  it  is  self-evident  that  it  was  only  upon  the 
exercise  of  the  power  that  the  estate  in  the  plaintiffs  in 


113 

error  became  complete.  Without  the  exercise  of  the 
power  of  appointment  the  estates  in  remainder  would 
have  gone  to  all  in  the  class  named  in  the  deeds  of  Will- 
iam B.  Astor.  Notwithstanding  the  common  law  rule  that 
estates  created  by  the  execution  of  the  power  take  effect 
as  if  created  by  the  original  deed,  for  some  purposes,  the 
execution  of  the  power  is  considered  the  source  of  title. 
We  cannot  say  that  property  has  been  taken  without  due 
process  of  law  within  the  provisions  of  the  fourteenth 
amendment  *  *  *.  Nor  do  we  perceive  that  the  effect 
has  been  to  violate  any  contract  right. ' '  Chanler  v.  Kel- 
sey,  205  U.  S.  466. 

152.  Power  of  Appointment — When  Erroneous 
Prior  Assessment  Does  Not  Preclude  Tax 
on  Tranf er  by  the  Exercise  of  the  Poiver. 

Stephen  Buckingham  died  testate  a  resident  of  New 
York,  December  1st,  1887.  By  his  will  two  trusts  were  cre- 
ated, one  specific  and  one  residuary,  giving  Charles  Buck- 
ingham a  life  estate  therein  with  x>ower  to  appoint  the 
corpus  of  the  funds.  In  1888  an  appraisement  was  had 
under  the  Collateral  Inheritance  Tax  Law  of  1885-1887 
and  a  tax  was  imposed  against  Charles  H.  Buckingham 
on  the  specific  trust  on  the  theory  that  Charles  was  in- 
vested with  the  corpus  at  the  time  of  the  death  of  his 
Uncle  Stephen.  A  life  estate  was  taxed  to  Charles  Buck- 
ingham in  the  residuary  trust.  The  taxes  so  assessed 
were  paid.  The  value,  however,  of  Charles  H.  Bucking- 
ham's life  interest  in  the  two  trust  funds  was  only  $42,- 
000.00,  but  he  had  been  taxed  on  a  total  of  $66,000.00. 
Charles  Buckingham  died  a  resident  of  New  York,  test- 
ate. May  12th,  1904,  and  appointed  his  wife,  Elizabeth,  as 
the  beneficiary  of  both  funds.  In  an  appraisement  of  the 
estate  of  Charles  H.  Buckingham,  it  was  urged  by  the 


114 

executors  that  the  excess  payment  in  the  Stephen  Buck- 
ingham estate  should  be  applied  on  the  tax  to  Elizabeth. 
Heldj  that  the  tax  could  not  be  anticipated  on  Elizabeth 
Buckingham's  succession,  and 

**That  the  transfer  tax  which  is  sought  to  be  im- 
posed in  these  proceedings  mus.t  be  regarded  as  im- 
posed upon  a  transfer  created  by  the  will  of  Charles 
H.  Buckingham;  and  not  by  the  will  of  Stephen  M. 
Buckingham;  that  at  the  time  of  the  settlement  of 
the  estate  of  Stephen  M.  Buckingham  there  was  no 
law  in  existence  authorizing  the  imposition  of  such 
a  tax;  that  the  imposition  of  such  a  tax  was  not 
anticipated  in  fact,  and  could  not  have  been  antici- 
pated in  the  proceedings  by  which  the  Inheritance 
Taxes  were  adjusted  and  collected  in  the  estate  of 
Stephen  M.  Buckingham ;  and  that  the  right  of  Eliza- 
beth Buckingham  to  succeed  to  the  fund  in  question 
is.  taxable  as  a  transfer  effected  by  the  operation  of 
her  husband's  will  with  the  like  effect  as  though  such 
fund  belonged  absolutely  to  him  and  had  been  be- 
queathed to  her  in  and  by  his  will. ' '  Matter  of  Buch- 
ingham,  106  App.  Div.  (N.  Y.)  13. 

153.  Power  of  Appointment — Real  Estate  in  Neiv 
York  Appointed  by  Non-Resident  Donee 
Taxable. 

In  an  application  to  refer  to  the  appraiser  his  report 
for  further  consideration  it  appeared  that  Gertrude  L. 
Lowndes  died  testate,  a  resident  of  New  York,  and  be- 
queathed her  estate  in  trust,  as  follows:  Income  to  be 
paid  to  her  children  for  life  and  ^*upon  the  death  of 
either  of  them  to  convey,  transfer,  set  over  and  assign  an 
equal  one-fourth  part,  according  to  the  provision  of  any 
will  my  said  daughters  may  make,  and  in  default  of  a 
will,  then  to  convey,  transfer  and  set  over  such  equal 
fourth  part  to  the  issue  of  my  said  daughters.'* 

Annie  Chase  was  one  of  the  daughters  of  Gertrude  L. 


115 

Lowndes  and  exercised  the  power  of  appointment  con- 
ferred upon  her  in  substance,  as  follows : 

**A11  the  rest,  residue  and  remainder  of  my  estate 
and  any  and  all  estate  or  property  over  which  I  have 
power  of  disposition  or  appointment,  and  especially 
any  estate  in  which  I  have  any  interest,  or  over 
which  I  have  any  such  power  under  the  will  of  my 
mother,  Gertrude  L.  Lowndes,  I  give,  devise  and 
bequeath  to  my  husband  for  and  during  his  life  and 
upon  his  death  to  my  two  children. ' ' 

The  Court  held: 

**The  exercise  of  the  power  of  appointment  was 
the  medium  through  which  the  appointees  obtained 
their  title  and  not  by  the  will  of  Gertrude  L.  Lowndes 
{Matter  of  Coohsey,  182  N.  Y.  92).  The  donee  of 
the  power  (Annie  Chase)  was  a  non-resident  of  New 
York,  but  the  exercise  of  the  power  comprehended 
the  transfer  of  real  estate  situated  in  New  York; 
therefore  the  Surrogate's,  Court  of  New  York  had 
jurisdiction  of  the  proceeding  to  assess  a  tax  upon 
the  transfer  of  property  passing  by  virtue  of  the 
exercise  of  the  power  of  appointment.  {Matter  of 
Beaver,  63  App.  Div.  (N.  Y.)  283.)  The  proceeding 
should  be  amended  by  entitling  the  appraisement  as 
follows:  *In  the  Matter  of  the  Transfer  Tax  upon 
the  trust  created  by  the  will  of  Gertrude  L.  Lowndes, 
deceased,  for  the  benefit  of  Annie  L.  Chase  and  her 
appointees  or  heirs'  and  when  so  amended  the  ap- 
praiser's report  will  be  remitted  to  him  for  further 
consideration  and  report  in  accordance  with  the  di- 
rection expressed  in  the  opinion."  Matter  of 
Lowndes,  60  Misc.  Eep.  (N.  Y.)  506." 

154.     Danee  and  Appointee  Non-Resident — Prop- 
erty Within  the  State. 

Edward  C.  Lord  died  testate,  a  resident  of  New  Jersey, 
in  January,  1892.  His  will  was  admitted  to  probate  in 
the  Probate  Court  of  New  Jersey.  By  his  will  he  exer- 
cised two  powers  of  appointment  by  designating  Emily 


116 

M.  Lord,  his  widow,  the  beneficiary  of  the  following 
funds : 

1.  Trust  fund  transferred  by  deed,  delivered  in 
March,  1873,  use  of  property  to  Edward  C.  Lord, 
during  life,  with  power  to  dispose  of  the  corpus  of 
the  fund  by  will. 

2.  A  trust  created  by  the  will  of  Susan  Lord,  who 
died  in  1880,  bequeathing  property  to  Edward  0. 
Lord  during  his  life,  with  power  to  appoint  remain- 
der. 

Emily  M.  Lord  died  a  resident  of  New  Jersey  before 
the  will  of  Edward  C.  Lord  was  admitted  to  probate. 
Part  of  the  property  composing  the  trust  funds  was  situ- 
ate in  the  State  of  New  York  and  held  by  the  trustees, 
who  were  residents  of  that  State.  The  property  situated 
in  New  York  composing  said  two  trust  funds,  and  ap- 
pointed by  the  will  of  Edward  C  Lord,  passed  by  the 
exercise  of  the  power  of  appointment  to  Emily  M.  Lord 
and  were  therefore  taxable  to  her.  Matter  of  Lord,  111 
App.  Div.  (N.  Y.)  152. 

155.  Mortgages  Held  Outside  State  Transferred 
by  Non-Resident  Under  Testamentary 
Power  Created  by  Will  of  Deceased  Resi- 
dent of  New  York. 

Testator  died  a  resident  of  New  York  in  1870.  His 
will  created  a  trust  for  the  life  of  his  daughter,  Mrs. 
Sheldon,  with  power  to  appoint  by  will.  Mrs.  Sheldon 
died  a  resident  of  the  State  of  Ehode  Island,  testate,  and 
exercised  the  power  of  appointment  created  in  her  by 
the  will  of  her  father.  The  surviving  trustee  of  testa- 
tor's will  was  a  resident  of  Ehode  Island.  The  trust 
estate  which  was  disposed  of  by  Mrs.  Sheldon's  will 
wholly  consisted  of  bonds  secured  by  mortgages  on  real 
estate,  which  said  real  estate  was  in  New  York,  but  none 


117 

of  the  bonds  were  ever  kept  in  New  York.  The  Court 
held:  *^As  Mrs.  Sheldon,  in  making  her  will,  exercised 
a  privilege  granted  by  her  own  State  and  not  by  this 
State,  and  the  transfer  of  the  property  effected  by  the 
exercise  of  the  power  was  beyond  the  reach  of  the  New 
York  Tax  Law,  the  State  (N.  Y.)  had  no  dominion  over 
the  property  transferred.''  Matter  of  Fearing,  200  N.  Y. 
340. 

156.  Po-virer    of   Appointment— WlLen    Not    Exer- 

cised. 

Testatrix  died  December  25th,  1883,  before  any  Inher- 
itance Tax  legislation  in  New  York.  She  devised  her 
residuary  estate  to  her  husband  for  his  life  with  power 
in  him  to  appoint  the  corpus  by  will.  The  husband  died 
September  16th,  1894,  testate,  and  his  will  contained  the 
following  provision:  **I  direct  my  executors  to  keep 
the  estate  of  my  deceased  wife  separate  from  my  estate, 
and  to  distribute  her  estate  according  to  the  provisions 
of  her  last  will  and  testament,  by  delivering  the  same 
to  the  executors  named  in  her  will,  for  that  purpose.'' 
This  was  the  only  section  claimed  to  show  an  execution 
of  the  power.  The  Court  held:  That  the  husband's  will 
was  in  effect  a  relinquishment  or  renunciation  of  the 
power  of  appointment.  That  it  was  a  declaration  of  his 
purpose  not  to  exercise  the  power,  but  to  allow  the  prop- 
erty to  pass  under  the  will  of  his  wife.  The  property 
passing  under  the  will  of  a  person  who  died  prior  to 
Inheritance  Tax  legislation  is  not  taxable.  Matter  of 
Langdon,  153  N.  Y.  6. 

157.  When  Appointee  Takes  Under  "Will  Creating 

Po"wrer  and  Not  by  Exercise  of  PoxiT'er. 

Testator  left  one-fifth  of  his  property  in  trust  for  his 
son  for  life,  remainder  to  the  s.on's  heirs  '*or  to  such 


118 

person  or  persons  as  such  child  may  appoint  in  his  last 
will  and  testament/'  The  son  died  testate,  appointing 
his  own  children  as  beneficiaries.  Held,  that  the  chil- 
dren of  the  son  did  not  take  by  their  father's  will  through 
the  exercise  of  the  appointment,  but  that  they  took  from 
the  grandfather  (original  testator).  No  transfer  tax  law 
having  been  passed  at  the  time  of  the  death  of  said  tes- 
tator (grandfather),  no  tax  is  assessable.  Matter  of 
Backhouse,  110  App.  Div.  (N.  Y.)  737.  See  Matter  of 
Cooksey,  182  N.  Y.  92. 

158.     When  Exercise  of  Power  Is  Mere  Form  Ben- 
eficiary Takes  by  Will  Creating  Power, 

A  resident  of  New  York  died  testate  in  August,  1875, 
limiting  his  residuary  estate  for  the  benefit  of  his  wife 
and  daughters.  Anna  K.  Shaw,  one  of  the  daughters, 
was  given  one-half  of  one  share  absolutely,  the  other 
half  to  trustees  with  directions  to  pay  the  income  there- 
from to  said  Anna  K.,  during  life,  and  on  her  death  to 
transfer  the  principal  of  said  one-half  to  her  issue,  *  *  and 
in  case  no  such  issue  shall  survive  her,  then  to  pay  and 
transfer  the  said  last  mentioned  one-half  share  to  such 
person  or  persons  as.  my  said  daughter  shall,  by  her  last 
will,  appoint,  and  in  default  of  appointment,  to  daughter 
C.  H.  Crafts,  if  she  shall  survive  the  said  Anna,  etc.'' 

Anna  K.  had  no  children  and  died  without  issue  in 
March,  1907,  leaving  her  sister,  C.  H.  Crafts,  surviving. 
The  Court  held :  The  remainder  in  said  one-half  vested 
on  the  death  of  testator  in  1875  in  C.  H.  Crafts,  his 
daughter,  s.ubject  to  be  divested  by  the  birth  of  issue  to 
Anna  K.,  or  by  the  execution  of  the  power.  Section  31 
of  the  real  property  law  provides  that  the  existence  of  an 
unexecuted  power  does  not  prevent  the  vesting  of  a  fu- 
ture estate.    C.  H.  Crafts  was  a  person  in  being  at  the 


119 

death  of  her  father  and  her  interest  was  therefore  a 
vested  remainder.  The  execution  of  the  power  only  took 
effect  on  the  death  of  Anna  K.  After  the  will  of  Mrs. 
Shaw  was  admitted  to  probate  C.  H.  Crafts,  by  a  formal 
instrument  in  writing  duly  verified,  claimed  the  trust 
funds  under  the  will  of  her  father,  who  died  in  1875,  and 
in  no  respect  did  she  take  under  the  action  of  her  sister, 
Anna  K.  The  exercise  of  a  power  which  leaves  every- 
thing as  it  was  before  is  a  mere  form  with  no  substance. 
{Matter  of  Coohsey,  182  N.  Y.  92,  distinguished.)  Mat- 
ter of  Eaggerty,  128  App.  Div.  (N.  Y.)  479.  Affirmed 
194  N.  Y.  550,  without  opinion. 

159.     When  Appointee  Elects  to  Take  by  "Will  In- 
stead of  Poiver. 

Decedent  died  a  resident  of  New  York  in  1869,  and 
provided  by  his  will  that  his  estate  should  be  divided  into 
as  many  equal  portions  as  there  were  surviving  children; 
one  of  the  portions,  was  given  to  each  of  said  children 
in  trust  for  the  life  of  each  child  and  after  death  to  the 
heirs  at  law  of  such  child,  with  power  to  dispose  of  the 
respective  remainders  among  their  heirs  and  collateral 
relatives  in  such  proportion  and  manner  and  limitations 
as  they  saw  fit.  Jeanette  S.  Lansing,  one  of  the  surviv- 
ing children,  died  in  1904,  and  by  her  will  appointed  her 
only  child,  Jeanette  Lansing  McVicker,  as  the  beneficiary 
of  one  share.  The  Court  held :  Although  the  power  was 
exercised  (by  Mrs.  Lansing)  in  form,  the  rights  of  Mrs. 
McVicker  were  already  vested.  The  power  was  to  dis- 
pose of  the  remainder,  but  the  remainder  was  not  dis- 
posed of,  as  it  continued  where  it  was.  The  attempt  to 
execute  the  power  was  not  effective  because  it  did  noth- 
ing. An  appointee  under  a  power  has  the  right  of  elec- 
tion, the  same  as  a  grantee  under  a  deed,  and  Mrs.  Mc- 


120 

Vicker  elected  to  take  under  the  will  of  her  grandfather, 
who  died  in  1869.  Held  not  taxable.  Matter  of  Lansing, 
182  N.  Y.  238. 

160.  Value  of  Property  Not  Diminislied  by  Life 

Estate  Previously  Taxed. 

In  an  appraisement  of  the  estate  of  decedent,  who  died 
in  August,  1892,  the  surrogate,  by  approval  of  an  ap- 
praiser's report,  determined  the  value  of  a  fund  passing 
to  testator's  daughter  to  be  $27,000.00  and  the  life  estate 
of  the  daughter  to  be  $22,000.00,  leaving  a  remainder  of 
about  $5,000.00  which  was  not  taxed,  as  it  could  not  then 
be  determined  to  whom  it  would  pass.  The  life  tenant 
(daughter)  died  in  1899  testate,  and  exercising  a  power 
to  appoint  said  fund  which  was  created  by  her  father's 
will.  In  a  second  appraisement,  after  the  death  of  the 
life  tenant,  it  was  urged  that  the  tax  should  be  one  per 
cent,  upon  the  original  value  of  the  remainder,  which  was 
about  $5,000.00.  The  surrogate  held  that  the  transfer 
of  the  fund  by  the  exercise  of  the  power  effected  a  com- 
plete transfer  of  the  entire  property  and  that  said  fund 
should  not  be  diminished  by  the  valuation  of  the  life 
estate  previously  taxed.  Re  Tucker's  Estate,  59  N.  Y. 
S.  699. 

161.  Relationsliip    of    Donee    of    Power   to    Ap- 

pointee Determines  Rate  of  Tax. 

Matter  of  Seaver,  71  N.  Y.  Supp.  544. 
Matter  of  Walworth,  72  N.  Y.  Supp.  984. 
Matter  of  Rogers,  75  N.  Y.  Supp.  835. 

162.  Rate  of  Taxation  Governed  by  Law  in  Force 

at  the  Time  of  the  Exercise  of  the  Pow^er. 

Walworth's  Estate,  72  N.  Y.  Supp.  984. 


121 

163.  Exemptions — Relationsliip — Rates    of    Tax— - 

'When  Tax  Accures — All  Questions  Deter- 
mined as  of  Date  of  Transfer. 

164.  Tax  Accrues  at  Death  of  Decedent. 

The  descent  of  property  in  Illinois,  whether  by  inherit- 
ance or  devise,  is  regulated  entirely  by  statutory  provi- 
sions. {Kochersperger  v.  Drake,  167  111.  122.)  All  the 
property  owned  by  any  person  at  his  decease  passes 
either  under  the  Statute  of  Descent  to  the  persons  men- 
tioned in  that  statute,  or  under  the  Statute  of  Wills,  to 
his  devisees. 

The  Inheritance  Tax  Law  provides  that  all  property  so 
descending,  whether  under  the  Statute  of  Wills  or  the 
Statute  of  Descent,  siall  be  subject  to  a  tax  at  certain 
specified  rates  at  the  fair  market  value  thereof,  which 
shall  be  due  at  the  death  of  decedent.  The  tax  is  not 
upon  the  estate  of  decedent,  but  upon  the  right  of  suc- 
cession, and  it  accrues  at  the  same  time  the  estate  vests — 
that  is,  upon  the  death  of  the  decedent.  Questions  may 
arise  as  to  the  persons  in  whom  the  title  vests,  and  such 
questions  may  affect  the  amount  of  the  tax  and  the  per- 
son whose  estate  shall  be  chargeable  with  it;  but  when 
those  questions  are  finally  determined  their  determina- 
tion relates  to  the  time  of  the  decedent's  death.  No 
change  of  title,  transfers  or  agreements  'of  those  who 
succeed  to  the  estate,  among  thems.elves  or  with 
strangers,  can  affect  the  tax.  All  questions  concern- 
ing it  must  be  determined  as  of  the  date  of  the  deced- 
ent's death.    Re  Estate  of  Graves,  242  111.  212. 

165.  Beneficial   Interest — Transfer   Mnst  Be   Ef- 

fected "While  Tax  Law  Is  In  Force. 

The  beneficial  interest  is  taxable.    The  tax  does  not 


122 

affect  rights  accruing  by  the  death  of  a  decedent  prior 
to  inheritance  tax  legislation.  Matter  of  Seaman,  147 
N.  Y.  69. 

166.  Rate  of  Tax  Determined  by  Relationship. 

The  rate  of  tax  is  determined  by  the  relationship  of 
the  decedent  to  beneficiary.  An  assignment  by  the  bene- 
ficiary of  his  interest  presupposes  an  ownership  and  the 
succession  is  in  the  beneficiary  and  not  the  assignee. 
Matter  of  Cook,  187  N.  Y.  253. 

167.  Exemption. 

The  beneficiary  claiming  exemption  must  point  to  the 
provision  of  the  law  sustaining  his  claim.  Kavanaugh's 
Estate,  6  N.  Y.  S.  669. 

168.  Exemption — Statutory  Exemption  Relates  to 

the  Share  of  Beneficiary. 

In  reviewing  an  act  of  Congress  of  June  13th,  1898, 
Chap.  448,  usually  spoken  of  as  *^The  War  Revenue  Act" 
(20  Stat.  448),  so  far  as  the  s,ame  relates  to  Sections  29 
and  30,  which  provides  for  a  tax  on  *  legacies  and  dis- 
tributive shares  of  personal  property,''  the  Court  held, 
among  other  things,  as  follows : 

1.  That  the  tax  is  on  the  legacy  or  distributive 
share,  the  rate  being  determined  by  the  relation  of 
the  legatee  to  the  decedent. 

2.  That  the  money  exemption  does  not  relate  to 
the  estate  of  decedent,  but  to  the  share  of  the  legatee 
or  distributee. 

Knowlton  v.  Moore,  178  U.  S.  41. 

169.  Exemptions-— Claimant   Mnst   ShoT^   Exemp- 

tion. 

A  person  claiming  exemption  must  show  the  particular 


123 

statute  granting  it.    An  exemption  will  not  be  presumed. 
Matter  of  Moore,  97  Sup.  Ct.  Rep.  (N.  Y.)  162. 

170.  Exemptions — Xot  Favored. 

The  provisions  of  a  law  granting  exemptions  are  to  be 
strictly  construed  against  a  claimant.  The  beneficiary 
must  be  clearly  within  the  statutory  language.  Dos 
Passos  on  Inheritance  Tax  Law,  2d  Ed.  74;  Re  Fayer- 
weather,  143  N.  Y.  119  (38  N.  E.  278) ;  Re  Prime,  136 
N.  Y.  347;  People  v.  Cameron,  124  N.  Y.  S.  949;  Re 
ArnoVs  Estate,  130  N.  Y.  S.  499. 

171.  Lineal    Descendants— Children    of    Adopted 

Child. 

'  *  Lineal  descendants ' '  means  the  direct  descendants  of 
the  decedent  whose  death  effects  the  transfer.  It  does 
not  refer  to  nephew  or  niece  unless  expressly  stated  in 
the  statute.  {Matter  of  Miller,  45  Hun  244;  Matter  of 
Smith,  45  Hun  90.)  The  children  of  adopted  children 
or  of  persons  to  whom  the  testator  stood  for  ten  years 
prior  to  death  in  the  mutually  acknowledged  relation  of 
a  parent  are  not  lineal  descendants  within  the  statute 
and  are  not  entitled  to  an  exemption  from  taxation  un- 
der the  Inheritance  Tax  Law  of  New  York.  {Matter  of 
Moore,  90  Hun.  162;  Matter  of  Bird,  32  St.  Rep.  899.) 
Greene's  Law  of  Taxable  Transfers,  2nd  Ed.  57. 


172.  Particular  Rates  of  Taxation  and  Exemp- 
tions Under  the  Illinois  Laxir  in  Force  July 
1,  1895. 

Beneficiaries  or  transferees  are  divided  into  three 
classes  for  the  purpose  of  taxation.  The  first  class  con- 
sists of  those  having  some  direct  relationship  by  blood 
or  marriage  with  decedent  or  his  family,  excepting  grand- 


124 

parents.  The  second  class  consists  of  the  collateral  rela- 
tives further  removed  than  brothers  and  sisters.  The 
third  class  comprehends  those  farther  removed  in  rela- 
tionship, strangers  in  blood  and  those  institutions  and 
corporations  not  expressly  exempt  by  law. 

173.  Transfers  Under  the  Illinois  Law  Effected 

Prior  to  July  1,  1909— Rates  and  Rights  of 
the  Parties. 

If  a  transfer  is  effected  prior  to  July  1st,  1909,  and  on 
or  after  July  1st,  1895,  the  rates  and  rights  of  the  par- 
ties are  determined  by  the  law  in  force  July  1st,  1895. 
The  exemption  to  beneficiaries  of  the  first  class  is  $20,- 
000.00  and  the  rate  1%  on  the  total  amount  or  value  taken 
in  excess  of  $20,000.00. 

Beneficiaries  of  the  second  class  are  each  exempt 
$2,000.00  and  taxable  at  2%  on  the  excess  thereof,  re- 
gardless of  the  amount  or  value  of  the  property  taken. 

Beneficiaries  of  the  third  class  have  no  statutory  ex- 
emption, but  no  tax  is  assessable  unless  the  share  of 
each  beneficiary  equals  the  value  of  $500.00.  "When  the 
share  equals  the  value  of  $500.00  and  does  not  exceed 
$10,000.00  the  rate  is  3% ;  when  the  share  is  over  $10,- 
000.00  but  does  not  exceed  $20,000.00  the  rate  is  4%. 
When  the  share  is  over  $20,000.00  and  does  not  exceed 
$50,000.00  the  rate  is  5% ;  when  the  share  exceeds  $50,- 
000.00  the  rate  is  6%  on  the  total  value  of  the  property 
taken  by  each  beneficiary. 

174.  Illinois  Law  in  Force  July   1,   1909— Rates 

and  Exemptions, 

The  Inheritance  Tax  Law  in  force  July  1st,  1909,  made 
no  change  in  the  classification  for  taxation  but  increased 
the  rates,  as  follows : 

First  Class  Beneficiaries:    The  father  of  deceased  is 


125 

exempt  $20,000.00.  If  a  father  receives  $20,000.00  or  less, 
his  succession,  share,  interest  or  transfer  is  not  taxable. 
If  the  total  of  his  gifts,  transfers,  shares  or  succession 
exceeds  $20,000.00  and  equals  $100,000.00  or  less,  $20,- 
000.00  is  exempt  and  the  rate  of  tax  is  1%  on  the  exoess 
thereof. 

Illustration : 

All  personalty $82,000.00 

One-half  real  estate. . .,  14,000.00 
Dower  in  other  half. . .     4,000.00 


$100,000.00,  exemption  $20,000, 
Rate  1%,  Tax  $800.00 

If  a  father  receives  over  $100,000.00  he  is  exempt  $20,- 
000.00  and  the  rate  of  ta:K  is  2%  on  all  property  received 
over  $20,000.00. 

Illustration: 

All  personalty $94,000.00 

One-half  real  estate. .  .46,000.00 
Dowerin  other  half...  10,000.00 


$150,000.00,  exemption  $20,000, 
Rate  2%,  Tax  $2,600.00 

The  mother,  husband,  wife,  children,  grandchildren, 
brothers  and  sisters  of  decedent  have  the  same  exemp- 
tions and  are  taxed  at  the  same  rates  as  the  father  of  de- 
cedent. The  wife  or  widow  of  the  son,  and  husband  of 
the  daughter,  of  decedent  have  the  same  exemptions  and 
are  taxable  at  the  same  rates  as  a  father  of  decedent. 

175.     Husband  of  a  Daughter  Who  Died  Before 
Testator. 

The  husband  of  a  daughter  of  a  testator  has  the  same 


126 

exemption  as  the  daughter.  The  fact  that  the  daughter 
died  before  the  testator  is  immaterial.  Matter  of  Wool- 
sey,  19  Abbott's  N.  C.  232.  Matter  of  McCarvey,  6  Dem. 
145. 

176.  Wlien  Husband  of  Deceased  Daughter  is  Re- 

married. 

Under  the  New  York  Transfer  Act  of  1892  a  bequest 
to  the  husband  of  a  daughter  is  not  affected,  so  far  as 
taxation  is  concerned,  by  the  death  of  the  daughter,  prior 
to  her  father,  and  the  remarriage  of  the  husband  of  said 
deceased  daughter.    Ray's  estate,  35  N.  Y.  S.  481. 

177.  Widow  of  Adopted  Son  Is  "Widow  of  a  Son." 

Under  the  Transfer  Tax  Law  of  New  York,  the  words 
** widow  of  a  son''  cover  the  widow  of  an  adopted  son. 
Matter  of  Duryea,  128  App.  Div.  (N.  Y.)  205. 

178.  Adoption— When  Effected  in  Foreign  State 

Entitles  Beneficiary  to  Exemption. 

A  testator,  who  died  in  September,  1899,  transferred 
**to  my  adopted  son  Edward  K.  Butler,  500  shares  of 
stock''  of  the  value  of  about  $50,000.00.  Edward  K.,  was 
adopted  by  decedent  and  his  wife  under  the  laws  of  the 
State  of  Massachusetts.  Held,  that  the  exemption  to 
adopted  children  was  not  confined  to  those  adopted  un- 
der the  laws  of  New  York,  but  was  to  be  extended  to  chil- 
dren adopted  under  the  laws  of  other  States  when  such 
laws  corresponded  to  the  laws  of  the  State  of  New  York. 
Matter  of  Butler,  65  Sup.  Ct.  Kep.  (N.  Y.)  400. 

179.  Children  of  an  Adopted  Child  Are  ''Lineal" 

Descendants  of  Decedent. 

The  Court  of  Appeals  of  New  York  in  passing  upon 
the  question  whether  the  children  of  an  adopted  child  of 


127 

testator  were  lineal  descendants  of  such  testator,  said: 
**A  lineal  descendant  is  one  who  is  in  the  line  of  descent 
from  a  certain  person,  bnt  since  the  Domestic  Relations 
Law  went  into  effect,  not  necessarily  in  the  line  of  gen- 
eration." Held,  that  children  of  an  adopted  child  were 
included  under  **any  lineal  descendant  of  such  deced- 
ent." L.  1896.  Matter  of  Coo'k,!^!'^.  Y,2b3,  114  App. 
Div.  (N.  Y.)  718,  reversed. 

180.  Child  of  Adopted  Child— When  Taxable. 

Children  of  an  adopted  child  are  not  designated  as 
exempt  by  the  Inheritance  Tax  Act.  Such  children  are 
taxable  as  strangers.  Matter  of  Moore,  90  Hun  162. 
Matter  of  Fisch,  34  Misc.  Rep.  (N.  Y.)  146.  Matter  of 
Bird,  32  N.  Y.  St.  Rep.  899. 

181.  Relation  of  Parent  to  Beneficiary — Must  Be 

Clearly  Shown. 

By  decedent's  will  property  was  transferred  to  his 
*  ^nieces".  An  objection  was  made  to  the  tax  assessed 
by  the  surrogate  on  the  ground  that  decedent  stood  in 
the  acknowledged  relation  of  parent  to  such  nieces.  The 
evidence  disclosed  that  the  beneficiaries  were  referred  to 
as  ** nieces''  and  that  the  beneficiaries  referred  to  de- 
cedent as  ** uncle".  No  relationship  of  parent  and  child 
was  shown  except  by  inference  or  conclusion.  Held,  that 
no  person  is  impliedly  exempt  from  taxation  and  that 
the  statute  is  to  be  strictly  construed  against  the  claim- 
ant. That  the  relationship  was  not  established.  Matter 
of  Deutsch,  107  App.  Div.  (N.  Y.)  192. 

182.  Acknowledged  Relation  of  Parent. 

John  H.  Beach  died  testate,  a  resident  of  New  York, 
September  28th,  1893,  and  by  codicil  devised  to  appel- 


128 

lant,  Caroline  A.  James,  real  property  valued  at  $100,- 
000.00  and  personal  property  worth  $4,500.00.  Testator 
was  sixty-eight  years  of  age,  a  widower  and  died  with- 
out issue  or  lineal  descendants.  In  1881  appellant  (Mrs. 
James)  and  her  husband,  at  the  solicitation  of  Beach,  be- 
came members  of  his  family  (appellant  at  that  time  being 
over  thirty  years  of  age),  under  an  oral  understanding 
between  them  that  Mrs.  James  should  be  regarded  and 
treated  by  Beach  as  his  daughter  and  that  she  should 
regard  him  as  her  parent.  Beach  and  Mr.  and  Mrs. 
James  lived  in  the  same  house  as  one  family ;  Mrs.  James 
managed  the  affairs  of  the  household  and  Beach  de- 
frayed the  household  expenses.  The  testator  introduced 
appellant  as  his  daughter.  The  relation  of  parent  and 
child  was  continued  until  testator's  death. 

It  was  contended  by  respondent  that  Section  2,  Chap- 
ter 399,  Laws  of  1892,  was  intended  to  cover  only  ille- 
gitimate children  as  decided  by  the  General  Term  in 
Matter  of  Hunt,  86  Hun  232. 

Held,  that  the  exemption  covers  any  person  related 
by  blood,  or  a  stranger,  adult  or  minor,  to  whom  a  de- 
cedent stood  in  the  relation  of  parent  for  the  period  pro- 
vided by  law.  {Hunt  case  not  followed.)  Eeversing 
Matter  of  Beach,  19  App.  Div.  (N.  Y.)  630.  Matter  of 
Beach,  154  N.  Y.  242. 

183.     Parent  and  Child — Mutually  Acknowledged 
Relation. 

Chapter  399,  Laws  1892  (N.  Y.)  providing  for  an  ex- 
emption in  certain  cases  to  a  beneficiary  to  whom  a  de- 
cedent, for  not  less  than  ten  years  prior  to  death,  stands 
in  the  mutual  acknowledged  relation  of  parent,  covers 
persons  not  adopted  as  children.  (Re  Hunt's  Estate, 
33  N.  Y.  S.  256,  not  followed.    Re  StillwelVs  Estate,  34 


129 

N.  Y.  S.  1123.   Matter  of  Nichols,  98  Sup.  Ct.  Rep.  (N.  Y.), 
134. 

184.  Children  of  Person  to  'Whom  Decedent  Stood 

in  Relation  of  Parent— Stranger  in  Blood. 

Caroline  C.  Moore  died  testate  a  resident  of  New  York, 
May  28th,  1887.  By  the  ninth  clause  of  her  will  Augusta 
C.  Graves  and  the  seven  children  of  Augusta  0.  Graves 
were  made  residuary  legatees  of  Mrs.  Moore's  property. 
A  construction  of  said  ninth  clause  of  decedent's  will, 
by  the  Court  of  Appeals,  126  N.  Y.  636,  it  was  held  that 
Augusta  C.  Graves  and  her  children  each  took  a  one- 
eighth  of  the  residue.  In  an  Inheritance  Tax  appraise- 
ment under  the  Law  of  1887  the  surrogate  assessed  an 
Inheritance  Tax  upon  Mrs.  Grave's  children  as  strangers 
in  blood  but  exempted  Mrs.  Graves  as  a  person  to  whom 
decedent  stood  in  the  mutually  acknowledged  relation  of 
parent  for  at  least  ten  years.  On  appeal  from  the  Surro- 
gate Court  it  was  held  that  the  Act  of  1885  as  amended 
in  1887  did  not  exempt  the  children  of  a  person  to  whom 
the  decedent  stood  in  the  relation  of  parent,  and  there- 
fore, that  the  children  of  Mrs.  Graves  were  taxable  as 
strangers  in  blood.  Matter  of  Moore,  90  Hun  162,  35 
N.  Y.  S.  782. 

185.  Children  of  Person  to  Whom  Decedent  Stood 

in  Relation  of  Parent  are  Taxable. 

In  an  appeal  by  one  Bowen  in  the  Estate  of  Mary 
Beecher,  deceased,  from  an  order  of  tax  entered  by  the 
County  Judge  of  Cook  County,  Illinois,  the  Court  held, 
that  under  Section  1,  Inheritance  Tax  Laws  of  Illinois, 
1895,  children  of  a  person  to  whom  the  decedent  (Mary 
Beecher)  stood  in  the  relation  of  parent  were  strangers 
in  blood  to  decedent  and  taxable  at  the  rates  provided  for 


130 

strangers.    Bowen  v.  People,  Cook  County  Court  Case 
No.  24872. 

186.  Act  of  1909  (Illinois)   liimits  Exemption. 

The  Illinois  Law  of  1909,  revising  the  Law  of  1895, 
limits  the  $20,000.00  exemption  to  any  person  to  whom 
the  deceased,  for  not  less  than  ten  years  prior  to  death, 
stood  in  the  acknowledged  relation  of  a  parent,  by  adding : 
'^Provided,  however,  such  relationship  began  at  or  be- 
fore said  person 's  fifteenth  birthday  and  was  continuous 
for  said  ten  years  thereafter :  And,  provided,  also,  that 
the  parents  of  such  person  so  standing  in  such  relation 
shall  be  deceased  when  such  relationship  commenced.'' 

It  is  to  be  noted  that  to  constitute  this  relationship 
certain  facts  must  exist : 

1st.  The  relationship  must  begin  at  or  before  the 
*^ person's''  fifteenth  birthday. 

2nd.  The  parents  of  the  person  must  be  dead  when 
relationship  commenced. 

3rd.  The  relationship  must  be  continuous  for  ten 
years  after  it  commenced. 

4th.  It  must  be  acknowledged  and  exist  at  the 
time  of  death. 

The  burden  of  proof  is  based  upon  the  person  claiming 
exemption  to  prove  all  material  facts  which  will  estab- 
lish the  exemption.  Matter  of  Davis,  98  App.  Div.  (N.  Y.) 
546, 184  N.  Y.  299. 

187.  Botli  Parents    Must    Be   Dead— Stepchild   a 

Stranger. 

The  word  *^ parents"  in  Section  1  of  the  Inheritance 
Tax  Act  of  1909  (Illinois)  is  plural  and  means  that  both 
of  the  parents  of  the  beneficiary  claiming  exemption  must 
be  dead  when  the  relationship  commenced.  Re  Stehhins 
Estate,  103  N.  Y.  S.  563;  Re  Harder  Estate,  108  N.  Y.  S. 


131 

154;  124  App.  Div.  (N.  Y.)  77;  Be  Wheeler's  Estate,  100 
N.  Y.  S.  1044;  Re  Edwin  Walker  Estate,  Cook  Coimty 
Court  (Illinois),  Appraisement  No.  3355. 

Under  the  above  cases  a  stepchild  could  not  come, 
within  the  exemption,  as  one  of  the  parents  of  said  step- 
child must  have  been  living  when  the  relationship  com- 
menced. 

188.     Grandmother  Not  a  ^'Ijineal  Descendants- 
Taxable  as  Stranger. 

**The  next  question  is,  whether  the  grandmother 
was  subject  to  the  Collateral  Inheritance  Tax,  under 
the  Act  of  7th  April,  1826,  Purdon  148.  The  only 
persons  exempted  from  the  operations  of  that  stat- 
ute are  carefully  enumerated.  They  are  father, 
mother,  husband,  wife,  children  and  lineal  descend- 
ants, born  in  lawful  wedlock.  Whoever  else  takes  an 
estate  of  inheritance  must  suffer  the  tax.  The  argu- 
ment here  is  that  the  case  of  a  grandmother  is  casus 
omiss^is,  but  we  cannot  perceive  the  slightest  ground 
for  thinking  the  Legislature  meant  to  exempt  her. 
It  is  true  that  the  Act  is  called  a  'Collateral  Inher- 
itance' tax  law,  and  that  a  grandmother  is  a  lineal 
and  not  a  collateral  relative,  but  when  the  enacting 
clause  of  a  statute  embraces  *  all  estate,  real,  personal 
and  mixed,  of  every  kind  whatsoever,  passing  from 
any  person  who  may  die  seized  or  possessed  of  such 
estate,'  and  then  excepts  only  such  takers  of  the  es- 
tate as  are  enumerated  in  the  excepting  clause,  it 
would  be  contrary  to  all  rules  of  construction  to  en- 
large the  excepting  at  the  expense  of  the  enacting 
clause.  'Expressio  unius,  exclusio  alterius,'  ap- 
plies here.  We  must  presume  the  Legislature  enu- 
merated all  takers  they  meant  to  except.  The  occa- 
sion of  the  law  was  suggested  by  those  oblique  in- 
heritances which  we  call  collateral,  which,  though 
provided  for  by  our  intestate  laws,  are  not  the  com- 
mon course  of  estates,  not  the  natural  tendencies  of 
property.  When  such  exceptional  instances  should 
occur,  the  Legislature  deemed  it  fair  to  tax  the  lucky 


132 

inheritors  altogether  beyond  the  usual  rate  of  taxa- 
tion, and  hence  this  tax  law.  Grandmothers  are  un- 
usual inheritors,  even  more  so  than  aunts  and  un- 
cles ;  and  having  enjoyed  the  chances  of  the  two  gen- 
erations between  which  she  stood,  there  would  seem 
to  be  no  especial  reason  why  that  which  comes  to  her 
from  the  second  generation  below  her  should  be  ex- 
empt from  public  burthens.  We  think  it  is  as  clear 
that  she  is  within  the  spirit  and  reason  of  the  stat- 
ute as  she  is  within  the  letter.''  McDowell  v.  Ad- 
dams  et  al.y  45  Pa.  430. 

189.  Second  Class  Beneficiaries— Uncle,  Aunt, 
Niece  or  Nephew,  or  Any  Lineal  Descend- 
ant of  the  Same. 

If  any  person  in  this  class  receives  over  $2,000.00  and 
not  to  exceed  $20,000.00,  an  exemption  of  $2,000.00  is 
allowed  by  law,  and  the  rate  is  two  per  cent,  on  the  ex- 
cess of  $2,000.00. 

Illustration: 

Legacy $20,000.00 

Exempt.... 2,000.00 


$18,000.00  at  2  % ,  tax  $360.00 

If  any  person  in  this  class  receives  over  $20,000.00  an 
exemption  of  $2,000.00  is  allowed  by  law  and  the  rate  of 
tax  is  four  per  cent,  on  the  excess  of  $2,000.00. 

Illustration: 

Legacy $25,000.00 

Exempt , 2,000.00 


$23,000.00  at  4%,  tax  $920.00 
190.     Contra. 

It  has  been  urged  before  the  County  Court  of  Cook 
County,  Illinois,  that  the  proper  application  of  rates  to 


ia3 

beneficiaries  of  the  first  class  (father,  mother,  child, 
widow,  etc.)  is  to  assess  a  one  per  cent,  rate  on  the  excess 
of  $20,000.00  up  to  $100,000.00  and  a  two  per  cent,  rate 
on  all  amounts  over  $100,000.00.    For  illustration : 

John  Jones,  husband. 

All  personal  property $90,000.00 

One-half  real  estate 46,000.00 

Dower  in  other  half  .., 14,000.00 

Transfer  in  contemplation  of  death  of 

decedent 10,000.00 

Transfer  to  take  effect  at  death  of  de- 
cedent    15,000.00 

$175,000.00 
$100,000.00 

20,000.00  (exemption) 

$  80,000.00  at  one  per  cent $  800.00 

75,000.00  at  two  per  cent. 1,500.00 

Total  tax $2,300.00 

Such  contention  would  also  apply  to  the  second  class. 
This  view  of  the  law  was  not  upheld,  the  County  Court 
holding  as  illustrated  in  the  examples  given  in  the  fore- 
going paragraphs. 

191.     Third  Class— Strangers  in  Blood,  Etc. 

If  $500.00  or  more  is  received  by  each  beneficiary  the 
transfer  thereof  is  taxable  as  follows :  The  law  does  not 
provide  for  an  exemption,  but  a  limitation  of  the  mini- 
mum amount  taxable. 

$500.00  and  over  and  not  exceeding  $10,000 3% 

Transfer  of  over  $10,000  and  not  exceeding  $20,000. .  4fo 
Transfer  of  over  $20,000  and  not  exceeding  $50,000. .  5% 
Transfer  of  over  $50,000  and  not  exceeding  $100,000.  6% 
Transfer  of  over  $100,000 10% 


134 

192.  Exemptions— $500  a  Limitation,  Not  an  Ex- 

emption. 

Tlie  Collateral  Inheritance  Tax  Act  of  1885  (N.  Y.)  as 
amended  in  1887,  providing  that  ^  *  an  estate  which  may  be 
valued  at  a  less  sum  than  $500.00'^  shall  be  exempt  from 
taxation,  was  not  intended  to  exempt  all  legacies  or  be- 
quests exceeding  that  sum  to  the  extent  of  $500.00.  The 
intention  was  to  place  a  minimum  limitation  on  the  amount 
taxable.  If  the  property  transferred  equals  or  exceeds 
$500.00,  it  is  taxable  without  an  exemption.  Matter  of 
Shermell,  125  N.  Y.  376;  Estate  of  Bird,  32  N.  Y.  St.  Bep. 
899. 

193.  Exemptions— $500.00  a  Limitation. 

The  $500.00  limitation  provided  by  the  New  York  Act 
of  1885  was  not  intended  to  apply  to  the  estate  of  dece- 
dent, but  rather  to  fix  the  minimum  value  of  a  bequest 
or  legacy  that  shall  be  taxable.  Matter  of  Howe,  112 
N.  Y.  100. 


135 


CHAPTER  III. 


Date  of  Valuing  Property,  Life  Estates,  Annuities  and 

Remainders. 


194.  Section  Two. 

195.  When  Life  Estate  is  Exempt 

— Exemptions  to  Certain 
Lineals  Abolished. 

196.  Discrimination     Between     Ee- 

mainders  to  Lineal  and  Col- 
lateral Heirs. 

197.  Constitutional    —    Discrimina- 

tion Between  Beneficiaries. 
Property  Transferred  with- 
out the  State  at  Death  of 
Donor. 

198.  Five  Per  Cent.  Bate  for  Valu- 

ing Annuities  and  Estates 
for  Life  or  Years. 

199.  Value  of  Property  Transferred 

— ^Fixed  as  of  what  time. 


200.  Eemainders  and  Life  Estates 

— how  Determined. 

201.  When    Life    Estate    Deducted 

and  not  Taxable. 

202.  Value  of  Eemainder — ^How  De- 

termined. 

203.  Eemainder  —  Value   of  —  How 

Determined. 

204.  Life  Estate — How  Determined 

after  Decease  of  Life  Ten- 
ant. 

205.  Life    Estate — Valuation   when 

Tenant      Predeceases      Ap- 
praisement. 

206.  Bond  may  be  Given  by  Bene- 

ficiary not  in  actual  Enjoy- 
ment or  Possession. 


194.  Section  Tivo.  WTien  any  property  or  inter- 
est therein  or  income  therefrom  shall  pass 
or  be  limited  for  the  life  of  another,  or 
for  a  term  of  years,  or  to  terminate  on  the 
expiration  of  a  certain  period,  the  property 
of  the  decedent  so  passing  shall  be  ap- 
praised immediately  after  the  death  of  the 
decedent,  and  the  value  of  the  said  life  es- 
tate, term  of  years  or  period  of  limitation 
shall  be  fixed  upon  mortality  tables,  using 
the  interest  rate  or  income  rate  of  five  per 
cent.;  and  the  value  of  the  remainder  in 
said  property  so  limited  shall  be  ascer- 
tained by  deducting  the  value  of  the  life 
estate,  term  of  years  or  period  of  limita- 
tion from  the  fair  market  value  of  the 
property  so  limited,  and  the  tax  on  the 
several  estate  or  estates,  remainder  or  re- 
mainders, or  interests,  shall  be  immedi- 
ately due  and  payable  to  the  treasurer  of 
the  proper  county,  together  with  interest 
thereon,  and  said  tax  shall  accrue  as  pro- 


136 

vided  in  Section  Three  (3)  of  this  act,  and 
remain  a  lien  upon  the  entire  property 
limited  until  paid;  provided,  that  the  per- 
son or  persons,  body  politic  or  corporate, 
beneficially  interested  in  property  charge- 
able ivith  said  tax,  elect  not  to  pay  the 
same  until  they  shall  come  into  actual  pos- 
session or  enjoyment  of  such  property, 
then  in  that  case  said  person  or  persons,  or 
body  politic  or  corporate,  shall  give  bond 
to  the  People  of  the  State  of  Illinois  in  a 
penal  sum  three  times  the  amount  of  the 
tax  arising  from  such  property,  limited 
ivith  such  sureties  as  the  County  Judge  may 
approve,  conditioned  for  the  payment  of 
the  said  tax  and  interest  thereon  at  such 
time  or  period  as  they  or  their  representa- 
tives may  come  into  the  actual  possession 
or  enjoyment  of  said  property;  ivhich  bond 
shall  be  filed  in  the  office  of  the  County 
Clerk  of  the  proper  county;  provided,  fur- 
ther, that  such  person  or  persons,  body  po- 
litic or  corporate,  shall  make  a  full  veri- 
fied return  of  said  property  to  said  County 
Judge  and  file  the  same  in  his  office  with- 
in one  year  from  the  death  of  the  decedent, 
with  the  bond  and  sureties  as  above  pro- 
vided: and,  further,  said  person  or  persons, 
body  politic  or  corporate,  shall  renew  said 
bond  every  five  years  after  the  date  of  the 
death  of  decedent. 

195.     When  Life  Estate  Is  Exempt — Exemptions  to 
Certain  Lineals  Abolished. 

Lineals  invested  with  estates  for  life  or  years  with  re- 
mainder over  to  collaterals,  or  strangers  were  exempt  from 
taxation  under  Section  2  of  the  Law  of  1895.  Ayers  v. 
Chicago  Title  <&  Trust  Company,  147  111.  42 ;  Billings  v. 
People,  189  111.  472  (Section  2  of  Act  of  1895  is  omitted 
from  Law  of  1909). 


137 

196.  Discrimination      Betiveen      Remainders      to 

liineal  and  Collateral  Heirs. 

On  the  question  whether  Section  2,  Law  1895,  exempted 
both  life  estates  and  remainders,  regardless  of  relation- 
ship of  remaindermen  to  testator,  and  further  that  if 
Section  2  was  construed  to  exempt  lineals  when  the  re- 
mainder went  to  a  collateral,  that  the  statute  was  un- 
constitutional, the  Court  held;  It  is  said  that  the  stat- 
ute discriminates  between  life  tenants  with  remainder  to 
lineal  descendants  and  life  tenants  with  remainder  to  col- 
lateral heirs,  by  imposing  a  tax  on  the  first  and  exclud- 
ing the  second  from  its  operation.  But  we  cannot  see 
that  this  is  a  mere  arbitrary  exaction  from  one  class, 
while  another  class,  which  cannot  be  differentiated  from 
it,  is  allowed  to  go  untaxed.  A  life  estate  with  the  fee 
descending  in  the  lineal  line  might  well  be  more  desirable 
than  a  life  estate  with  remainder  to  collateral  heirs  or 
strangers  in  blood.  At  any  rate  there  is  a  sufficient  dif- 
ference upon  which  the  Legislature  could,  without  tran- 
scending its  power,  base  a  classification.  Billmgs  v.  The 
People,  189  111.  472. 

197.  Constitutional — Discrimination     B  e  t  tt  e  e  n 

Beneficiaries — Property  Transferred  With- 
out the  State  at  Death  of  Donor. 

A  decedent  who  died  in  1907  a  resident  of  New  York 
did,  in  1903,  transfer  stocks  and  bonds  to  her  three  chil- 
dren; three-quarters  of  the  income  from  the  same  was 
made  payable  to  the  children  and  one-quarter  of  the  in- 
come was  reserved  to  the  donor  (decedent).  Although 
it  had  been  settled  by  decisions  that  the  reservation  of 
an  income  from  such  a  transfer  brought  the  same  within 
the  Transfer  Tax  Law,  yet  it  was  urged  that  said  Trans- 
fer Tax  Law  was  unconstitutional  on  the  ground  of  dis- 


138 

crimination  between  beneficiaries.  It  was  also  contended 
that  the  trust  property  was  not  within  the  jurisdiction  of 
the  State  of  New  York  for  the  reason  that  it  was  located 
without  that  State  at  the  time  of  death  of  decedent.  The 
Court  held:  That  the  discrimination  between  beneficia- 
ries was  not  unreasonable  and  that  it  was  within  the 
power  of  the  Legislature  to  single  out  classes  for  taxation 
and  leave  other  classes  exempt,  or,  taxable  at  a  different 
rate.  The  fact  that  the  property  was  without  the  State 
did  not  affect  the  liability  for  the  tax  in  New  York.  Mat- 
ter of  Kenney,  194  N.  Y.  281. 

198.  Five  Per  Cent.  Rate  for  Valuing  Annuities 

and  Estates  for  Life  or  Years. 

Section  2,  L.  1909  (Illinois)  fixes  an  arbitrary  rate  of 
^Ye  per  cent,  to  be  used  in  determining  the  present  value 
of  annuities  and  estates  for  life  or  years. 

199.  Value  of  Property  Transferred— Fixed  As  of 

"(Vhat  Time. 

All  property  transferred  is  appraisable  immediately 
after  the  death  of  decedent,  and  as  of  the  date  of  death. 
Re  Graves,  242  111.  212. 

200.  Remainders   and  Life   Estates — ^How  Deter- 

mined. 

The  value  of  a  remainder  is  determined  by  subtracting 
the  present  value  of  dower  or  estate  for  life,  years  or 
annuity  from  the  corpus  of  the  fund  upon  which  the  same 
is  predicated.  The  difference,  or  the  sum  remaining,  is 
the  present  value  of  the  remainder.  People  v.  Nelms, 
241  111.  571.     ('See  example  on  page  343.) 

201.  VKThen  Life  Estate  Deducted  and  Not  Taxable. 

In  passing  upon  the  effect  of  Section  2  of  the  Inherit- 


139 

ance  Tax  Law  of  Illinois,  in  force  July  1st,  1895,  the 
Court  held  that  a  life  estate  or  a  life  use  to  lineals  with 
remainder  to  lineals  effected  a  tax  upon  both  the  life  es- 
tate and  the  remainders.  That  it  was  only  in  case  where 
a  life  estate  was  limited  to  a  lineal  with  remainder  to 
collateral  or  stranger  that  the  life  estate  was  exempt  and 
the  remainder  taxable.  Re  Kingman,  220  111.  563.  Ayers 
V  Chicago  Title  S  Trust  Co.,  187  111.  42. 

202.  Value  of  Remainder — Hoxv-  Determined. 

The  value  of  a  vested  remainder  is  determinable  and 
taxable  at  the  date  of  death  of  decedent.  The  remainder 
is  determined  by  subtracting  the  present  value  of  the  life 
estate  from  the  property  limited.  People  v.  Nelms,  241 
ni.  571.  In  re  Lange,  55  N.  Y.  S.  (89  St.  Rep.)  750;  Mat- 
ter of  Bogert,  25  Misc.  Rep.  (N.  Y.)  466;  55  N.  Y.  S.  (89 
St.  Rep.)  751. 

203.  Remainder— Value  of— How  Determined. 

The  present  value  of  the  interest  of  a  widow  in  prop- 
erty limited  during  widowhood,  should  be  deducted  from 
the  corpus  of  the  trust  in  order  to  ascertain  the  remain- 
der, which  is  the  difference  between  the  two.  (L.  1892.) 
Matter  of  Sloane,  154  N.  Y.  109. 

204.  liif e  Estate — How  Determined  After  Decease 

of  Life  Tenant. 

To  determine  the  present  value  of  a  life  estate  under 
the  Transfer  Tax  Law  of  1887,  the  methods  and  tables 
of  mortality  used  by  the  State  Insurance  Commissioner 
should  be  employed.    Re  Jones,  59  N.  Y.  S.  983. 

205.  Life  Estate— Valuation   When  Tenant  Pre- 

deceases Appraisement. 

*  *  Where  a  tenant  for  life  dies  before  or  during  the 


140 

appraisement,  the  mortality  tables  are  the  basis  of 
determining  the  value  of  life  estate,  and  not  the  act- 
ual duration  of  life  measured  between  the  date  of 
tenant's  death  and  testator's  death.  One  of  the  rea- 
sons given  for  this  view  is  that  the  law  fixes  an  arbi- 
trary method  of  determining,  for  taxation,  the  value 
of  a  life  estate  and  remainder. ' '  MoElroy  on  Trans- 
fer Tax  Law,  2nd  Ed.  450-453,  citing  Matter  of 
Jones,  28  Misc.  Rep.  (N.  Y.)  356-59;  N.  Y.  S.  983.* 

206.     Bond  May  Be  Given  by  Beneficiary  Not  In 
Actual  Enjoyment  or  Possession. 

Section  2,  Laws  of  Illinois,  1909  (and  1895)  provides 
that  the  tax  on  all  interests  and  remainders  shall  remain 
a  lien  upon  the  entire  property  limited  until  paid.  Bene- 
ficiaries not  in  actual  possession  and  enjoyment  may  elect 
not  to  pay  until  possession  and  enjoyment  is  effected  by 
giving  a  bond  within  one  year  of  the  death  in  three  times 
the  amount  of  the  tax  *  *  arising  from  such  property,  lim- 
ited'^ renewable  every  five  years  after  death  of  decedent. 

A  strict  construction  of  the  words  **  arising  from  such 
property  limited*'  would  seem  to  necessitate  each  bene- 
ficiary in  the  corpus  to  give  a  bond  in  three  times  the 
amount  of  the  total  tax  arising  therefrom. 

Unless  some  arbitrary  rule  exists  inhibiting  a  more 
reasonable  application  of  this  language  to  the  facts  in 
each  case,  it  would  appear  that  a  safe  and  reasonable 
interpretation  would  be  that  each  beneficiary  or  trustee 
could  give  a  bond  in  three  times  the  amount  of  his  par- 
ticular tax  or  taxes,  as  the  lien  would  still  attach  to  the 
whole  property  limited,  and  it  would  seem  that  the  inten- 
tion of  the  Legislature  being  to  fully  protect  the  people  in 
collection,  the  end  is  gained  by  a  bond  on  each  particular 
tax  fixed. 


♦But  see  Re  Whites  Est..  134  N.  Y.  S.  281. 


141 

CHAPTER  IV. 
When  Tax  Is  Due — Interest. 


207.  Section  Three. 

208.  Tax — is  Due  and  Payable   at 

Death. 

209.  Tax  Paid  by  Whom! 

210.  Interest    is    chargeable    from 

death  —  Tax  must  be  Paid 
within  six  months  to  obtain 
discount  and  avoid  interest. 

211.  County  Court  cannot  go  Out- 

side of  Statute  to  Grant  Be- 
lief. 


212.  Courts — Cannot    Pass    on    the 

Wisdom  of  Legislative  Pol- 
icy. 

213.  Interest — Bate  Determined  by 

Law  in  Force  at  Death  of 
Testator. 

214.  Interest  —  on    Estates    Post- 

poned for  Taxation. 

215.  Deposit  to  save  Discount  and 

Interest. 


207.  Section  Three.     All  taxes  imposed  by  this 

Act,  unless  otherrxrise  herein  provided  for, 
shall  be  due  and  payable,  at  the  death  of 
the  decedent,  and  interest  at  the  rate  of 
six  per  cent,  per  annum  shall  be  charged 
and  collected  thereon  for  such  time  as  said 
taxes  are  not  paid:  Provided,  That  if  said 
tax  is  paid  ivithin  six  months  from  the  ac- 
cruing thereof,  interest  shall  not  be 
charged  or  collected  thereon,  but  a  dis- 
count of  five  per  cent,  shall  be  allowed  and 
deducted  from  said  tax;  and  in  all  cases 
where  the  executors,  administrators  or 
trustees  do  not  pay  such  tax  w^ithin  one 
year  from  the  death  of  the  decedent,  they 
shall  be  required  to  give  a  bond  in  the  form 
and  to  the  effect  prescribed  in  Section  2  of 
this  Act,  for  the  payment  of  said  tax,  to- 
gether with  interest. 

208.  Tax — ^Is  Due  and  Payable  at  Death. 

The  tax  is  not  upon  the  estate  of  the  decedent  but  upon 
the  right  of  succession,  and  it  accrues  at  the  same  time 
the  estate  vests — that  is,  upon  the  death  of  the  decedent. 
In  re  Graves,  242  111.  212;  Nat,  Safe  Dep.  Co.  v.  Stead, 


142 

250  m.  584;  Provident  Hospital  v.  People,  198  HI.  495; 
Re  Sanford's  Estate,  133  N.  W.  870  (Neb.). 

209.  Tax  Paid  By  AVhom? 

Each  beneficiary  must  pay  the  tax  assessed  on  Ms  suc- 
cession. Matter  of  Hoyt,  37  Misc.  Rep.  (N.  Y.)  720; 
Matter  of  Vanderhilt,  172  N.  Y.  69. 

210.  Interest    Is    Chargeable    From    Death — ^Taz 

Must  Be  Paid  ^Within  Six  Months  to  Ob- 
tain Discount  and  Avoid  Interest. 

Taxes  must  be  paid  within  six  months  from  the  death 
of  decedent  to  obtain  discount  and  avoid  interest.  An 
appraisement  of  the  estate  of  Coddington  Billings  in  the 
County  Court  of  Cook  County  presented  the  following 
facts.  Decedent  died  intestate,  a  resident  of  Cook 
County,  in  January,  189'6.  Letters  of  Administration 
were  issued  in  February,  1896,  and  an  inventory  was 
filed  by  the  administrators  in  June,  1896,  showing  per- 
sonal property  $271,000.00  and  real  estate  $39,000.00. 

On  May  31st,  1898,  an  Appraiser  was  appointed  by 
the  County  Judge  of  Cook  County,  who  returned  his  re- 
port on  July  16th,  1898,  which  was  approved  by  the 
County  Judge,  reporting  that  a  chancery  suit  was  pend- 
ing in  the  Circuit  Court  of  Cook  County,  involving  the 
ownership  of  all  the  property  inventoried  and  that  it  was 
impossible  to  determine  until  the  termination  of  the  chan- 
cery suit,  what  property,  if  any,  the  decedent  owned  at 
death  or  the  value  thereof,  and  recoromended  the  ap- 
praisement be  deferred  until  such  time  as  the  value  of 
decedent's  estate  could  be  determined. 

The  County  Judge  thereupon  entered  an  order  defer- 
ring the  appraisement  **  until  the  litigation  is  settled  or 
until  the  further  order  of  this  Court.''    The  said  litiga- 


143 

tion  was  determined  July  6,  1906,  settling  the  property 
interests  of  decedent  at  death,  and  on  March  30th,  1909, 
the  County  Judge  of  Cook  County  appointed  another 
Appraiser,  who  shortly  returned  a  report  finding  a  total 
net  estate  of  $85,054.00,  which  said  report  was  approved 
by  the  County  Judge  and  the  tax  fixed  at  $583.23,  plus 
interest  at  six  per  cent,  from  January  24th,  1896  (date 
of  Billing's  death)  to  date  of  payment. 

It  was  argued  that  an  impossibility  preventing  a  valu- 
ation and  determination  of  tax  within  six  months  from 
the  death  should  eliminate  interest  during  the  pendency 
of  the  litigation  and  that  interest  should  be  chargeable 
from  July  6th,  1906,  when  the  litigation  was  determined. 
The  County  Court  ordered  the  collection  of  interest  from 
the  date  of  death. 

On  this  subject  see:  People  v.  Rice,  40  Col.  508,  91 
Pac.  33;  Shelton  v.  Campbell,  109  Tenn.  690;  Common- 
wealth V.  Smith,  20  Pa.  St  100 ;  Commonwealth 's  Appeal, 
34  Pa.  St.  204;  Re  Sanford's  Estate,  133  N.  W.  870 
(Neb.). 

211.  County  Court  Cannot  Go  Outside  of  Statute 

to  Grant  Relief. 

Courts  cannot  go  outside  of  a  statute  to  grant  relief 
from  the  express  terms  of  a  statute  charging  interest. 
Re  Louisa  Del  Busto,  23  Wkly.  Notes  Cases,  111;  Re 
Fayerweather,  143  N.  Y.  114;  Re  Stewart,  131  N.  Y.  274; 
Re  Piatt's  Estate,  20  N.  Y.  S.  396;  Re  P rout's  Estate,  3 
N.  Y.  S.  831;  Miller's  Estate,  182  Pa.  157. 

212.  Courts — Cannot  Pass  On  the  'Wisdom  of  Leg- 

islative Policy. 

As  to  the  question  of  Legislative  policy,  the  Courts 
have  no  concern.   As  to  the  question  of  Legislative  power 


144 

there  is  a  judicial  duty  of  inquiry  and  determination. 
Gautier  v.  Ditmar,  129  N.  Y.  S.  834;  People  v.  Rice,  40 
Col.  508. 

213.  Interest — Rate  Determined  by  Iiaw  in  Force 

at  Death  of  Testator. 

**  Where  the  rate  of  interest  upon  unpaid  taxes  was 
changed  by  the  Law  of  1892,  interest  upon  taxes  accru- 
ing before  the  passage  of  that  Act  must  be  charged  ac- 
cording to  the  old  law.  {Matter  of  Milne,  76  Hun  328; 
Matter  of  Moore,  90  Hun  162.) ''  Greene's  Taxable  Trans- 
fers, 2nd  Ed.  67. 

214.  Interest^On  Estates  Postponed  for  Taxation. 

Under  the  Illinois  Act  of  1895  the  Supreme  Court  de- 
termined in  People  v.  McCormick,  208  111.  437,  and  BiU- 
ings  V.  People,  189  111.  472,  that  no  taxes  could  be  as- 
sessed until  the  beneficiary  became  indefeasibly  vested 
with  an  estate.  In  other  words,  all  contingent  interests, 
and  all  vested  estates  subject  to  condition  of  defeasance, 
were  not  taxable  until  the  remainders  became  indefeas- 
ibly vested. 

The  question  whether  interest  will  run  from  the  death 
of  testator  to  the  indefeasibly  vesting  of  the  contingent 
interest  is  the  subject  of  judicial  consideration  under  the 
New  York  Law  of  1885  and  1887.  Re  Davis,  149  N.  Y. 
539. 

215.  Deposit  to  Save  Discoimt  and  Interest. 

In  the  early  administration  of  the  law  in  Illinois,  there 
existed  a  practice  of  making  a  deposit  with  the  County 
Treasurer  within  six  months  of  decedent's  death  under 
an  arrangement  with  such  County  Treasurer  that  the 
five  per  cent,  discount  would  be  allowed  depositor  and  no 
interest  would  run  on  the  tax. 


145 

This  practice  has  long  been  abolished  in  Cook  County, 
as  clearly  without  legal  sanction.  There  are  no  deci- 
sions directly  upon  the  question.  However,  in  a  well- 
reasoned  opinion,  the  Attorney-General  of  Illinois*  has 
carefully  considered  the  legality  of  such  a  practice  and 
held  that  a  deposit  so  made  does  not  entitle  the  depos- 
itor to  the  discount  nor  stop  interest. 


♦W.  H.  stead  Opinion  post. 


146 


CHAPTER  V. 

Legal  REPKESENTATi\rE  to  Collect  Tax  From  Beneficiary 

OR  Heir. 


216.  Section  Four. 

217.  Administrator — must  Withhold 

Tax  from  Share  of  Benefici- 
ary. 

218.  Executor — Duty   to   Move    for 

Appraisement. 


219.  Executors  and  Administrators 

— Subrogation. 

220.  Executors — Liability. 

221.  Power  to  Apportion  Property 

to  pay  Legacies. 


216.  Section  Four.  Any  administrator,  executor 
or  trustee  having  any  charge  or  trust  in 
legacies  or  property  for  distribution  sub- 
ject to  the  said  tax  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be 
not  money  he  shall  collect  a  tax  thereon 
upon  the  appraised  value  thereof  from  the 
legatee  or  person  entitled  to  such  prop- 
erty, and  he  shall  not  deliver  or  be  com- 
pelled to  deliver  any  specific  legacy  or 
property  subject  to  tax  to  any  person  until 
he  shall  have  collected  the  tax  thereon; 
and  ivhenever  any  such  legacy  shall  be 
charged  upon  or  payable  out  of  real  estate 
the  heir  or  devisee,  before  the  paying  the 
same,  shall  deduct  said  tax  therefrom,  and 
pay  the  same  to  the  executor,  administra- 
tor or  trustee,  and  the  same  shall  remain  a 
charge  on  such  real  estate  until  paid,  and 
the  payment  thereof  shall  be  enforced  by 
the  executor,  administrator  or  trustee  in 
the  same  manner  that  the  said  payment  of 
said  legacies  might  be  enforced,  if,  hoiv- 
ever,  such  legacy  be  given  in  money  to  any 
person  for  a  limited  period,  he  shall  retain 
the  tax  upon  the  ivhole  amount,  but  if  it 
be  not  in  money  he  shall  make  application 
to  the  court  having  jurisdiction  of  his  ac- 
counts, to  make  an  apportionment  if  the 
case  requires  it,  of  the  sum  to  be  paid  into 
his  hands  by  such  legatees,  and  for  such 


147 

further  order  relative  thereof  as  the  ease 
may  require. 

217.  Administrator— Must    Withhold    Tax    From 

Share  of  Beneficiary. 

Administrators  are  charged  with  the  duty  of  conserv- 
ing the  State's  interest  in  property  transferred  under 
the  Inheritance  Tax  Law,  by  withholding  the  tax  from 
the  beneficiaries'  share  and  paying  the  same  to  the  proper 
collector  of  taxes.    Re  Carroll,  128  N.  W.  (Iowa)  929. 

218.  Executor — Duty  to  Move  for  Appraisement. 

*^The  dnty  of  applying  for  appraisement  is  primarily 
on  the  executor.  {Frazer  v.  People,  6  Dem.  174.)'' 
Greene's  Taxable  Transfers,  2nd  Ed.  94. 

219— Executors  and  Administrators— Subrogation. 

An  administrator  who  pays  a  tax  on  realty  out  of  per- 
sonal property  is  invested  with  rights  of  subrogation. 
Hughes  v.  Golden,  44  Misc.  Eep.  (N.  Y.)  128. 

220.  Executors— Liability. 

It  is  the  legal  duty  of  administrators  and  executors  to 
pay  the  tax  out  of  the  shares  of  the  distributees  and  not 
out  of  the  estate  (unless  specially  directed  by  will).  The 
requirement  of  the  statute  that  the  executor  or  adminis- 
trator shall  make  the  payment  is  prescribed  to  better  se- 
cure such  payment,  because  the  government  is  unwilling 
to  trust  solely  to  the  legatees.  Matter  of  GiJion,  169  N.  Y. 
443. 

221.  Power  to  Apportion  Property  to  Pay  Lega- 

cies. 

The  executor  of  a  non-resident  testator  having  prop- 
erty both  within  New  York  and  without  the  State,  may, 
in  the  payment  of  legacies  utilize  the  property  in  New 
York  and  save  the  same  from  Inheritance  Tax.  Matter 
of  James,  144  N.  Y.  6. 


148 


CHAPTER  VI. 

Legal  Representative — Duty — Liability. 


222.  Section  Five. 

223.  Executor — ^Personally  Liable. 

224.  Executor — ^Liability. 

225.  Collection  of  Tax — Executors, 

Etc.,  Must  Pay  Tax. 

226.  Executors,  Administrators  and 

Trustees   Personally  Liable. 

227.  Executors  and  Administrators 

Liable  to  Pay  Tax. 

228.  Executors  Liable  to  Pay  Tax. 

229.  Executor's  Liability. 


230.  Executors  —  Nonresident  Ex- 

ecutor not  Discharged  from 
Liability. 

231.  Executors — Personally  Liable. 

232.  Executor — When  not  Liable. 

233.  Executor  and  Administrator — 

Liability  not  Believed  by 
Discharge  without  Payment 
in  Probate  Proceeding. 

234.  Subrogation  —   Covenant     of 

Warranty  in  Deed  Transfer- 
ring Land  Subject  to  Tax. 


222.  Section  Five.  All  executors,  administrators 
and  trustees  shall  be  personally  liable  for 
the  payment  of  taxes  and  interest,  and 
ivhere  proceedings  for  collection  of  taxes 
assessed  be  had,  said  executors,  adminis- 
trators and  trustees  shall  be  personally 
liable  for  the  expenses,  costs  and  fees  of 
collection.  They  shall  have  full  poiver  to 
sell  so  much  of  the  property  of  the  deced- 
ent as  will  enable  them  to  pay  said  tax,  in 
the  same  manner  as  they  may  be  enabled 
to  do  by  law,  for  the  payment  of  duties  of 
their  testators  and  intestates,  and  the 
amount  of  said  tax  shall  be  paid  as  herein- 
after directed. 


223.     Executor — Personally  Liable. 

The  question  of  personal  liability  of  an  executor  dis- 
charged in  the  Probate  Court  without  payment  of  tax 
has  arisen  under  the  Illinois  Act  of  1895  in  the  County 
Court  of  Cook  County,  the  Court  holding  that  the  ex- 
ecutor was  personally  liable  for  all  taxes  (and  interest 
thereon)  accruing  on  the  transfer. 

People  V.  Gould,  No.  24150,  County  Court,  Cook 
County,  Illinois. 


149 

224.  Ezecntor^ — Liability. 

The  distribution  of  an  estate  before  appraisement  un- 
der the  Inheritance  Tax  Law  is  no  defense  to  an  assess- 
ment.   Estate  of  Hackett,  14  Misc.  Eep.  (N.  Y.)  282. 

225.  Collection  of  Tax — Executors,  Etc.,  Must  Pay 

Tax. 

Sections  1  and  9  of  the  Collateral  Inheritance  Tax  Law 
of  1885  and  1887  impose,  in  effect,  a  penalty  on  executors 
and  administrators  for  not  complying  with  an  express 
statutory  duty  to  pay  the  tax.  Matter  of  Strang,  117 
App.  Div.  (N.  Y.)  796. 

226.  Executors,  Administrators  and  Trustees  Per- 

sonally Liable. 

Executors,  trustees  and  administrators  are  presumed 
like  other  people,  to  know  the  law,  and  they  have  no 
right  to  permit  the  property  on  which  the  State  has  a 
lien  to  pass  out  of  their  possession  or  control  until  that 
lien  has  been  discharged. 

The  property  comes  into  their  possession  subject  to 
this  lien.  It  is  their  duty  to  call  the  attention  of  the  pub- 
lic officers  to  the  fact  that  they  have  the  estate  in  their 
possession,  and  that  it  is  subject  to  the  tax,  etc.  Re 
Strang,  102  N.  Y.  S.  1062. 

227.  Executors  and  Administrators  Liable  to  Pay 

Tax. 

An  executor  is  liable  to  pay  the  transfer  tax  before  he 
can  distribute  the  personal  property  in  his  hands,  or  to 
the  possession  of  which  he  is  immediately  entitled.  Mat- 
ter of  Zefita,  167  N.  Y.  280-284. 

228.  Executors  Liable  to  Pay  Tax. 

It  is  the  executor's  duty  to  pay  the  tax.  Matter  of  Em^ 
bury,  19  App.  Div.  (N.  Y.)  214-217. 


150 

229.  Executor's  Liability. 

**The  executor  is  personally  liable  for  the  payment 
of  tlie  tax,  and  must  account  therefor  on  final  settle- 
ment.^^ G-reene's  Law  of  Taxable  Transfers,  2nd 
Ed.  65. 

230.  Executors — Non-Resident  Executor  Not  Dis- 

charged From  Liability. 

Decedent  died  in  1895  a  resident  of  Connecticut,  the 
owner  of  property  located  within  the  State  of  New  York. 
Administration  was  had  in  Connecticut,  but  not  in  New 
York,  and  said  administration  was  closed  and  the  prop- 
erty distributed  without  the  payment  of  the  Inheritance 
Tax  due  said  State  of  New  York.  The  Court  held  that 
the  fact  of  distribution  did  not  relieve  either  the  execu- 
tor's duty  to  move  for  an  assessment  of  the  tax,  or  to 
make  payment  of  the  tax  assessed.  Matter  of  Hubbard, 
21  Misc.  Rep.  (N.  Y.)  566. 

231.  Executors — Personally  Liable. 

The  executor  is  personally  liable  for  the  tax  and  the 
Court  has  power  to  enforce  payment.  Re  Prout,  3  N.  Y. 
S.  831;  Re  Vanderbilt,  10  N.  Y.  S.  239. 

232.  Executor-^When  Not  Liable. 

When  an  appraisement  is  had  under  Section  13  of  the 
Act  of  1885  (N.  Y.)  and  the  District  Attorney  and  ex- 
ecutor are  notified  the  report  of  the  Appraiser  is  ready 
and  said  executor  and  District  Attorney  do  not  appear 
and  the  surrogate  thereupon  enters  an  order  of  tax  as  a 
taxing  officer,  no  appeal  being  taken  as  provided  by  stat- 
ute, all  parties  are  barred  from  reviewing  the  order.  Ex- 
ecutors who  comply  with  the  surrogate's  order  of  tax 
and  make  payment  pursuant  to  that  order,  are  relieved 
from  liability.    Matter  of  Wolfe,  137  N.  Y.  205. 


151 

233.  Executor  and  Administrator— Liability  Not 

Relieved  by  Discharge  "Without  Payment 
in  Probate  Proceeding. 

A  decree  of  distribution  of  a  court  of  probate  does 
not  protect  the  executor  from  liability  for  Inheritance 
Tax.  The  fact  the  executor  acted  in  good  faith  is  not 
material.  Attorney-General  v.  Rafferty,  95  N.  E.  (Mass.) 
747. 

234.  Subrogation — Covenant  of  Warranty  in  Deed 

Transferring  Land  Subject  to  Tax. 

* '  A  certain  Martha  Pollock,  owning  a  tract  of  land 
(a  portion  of  which  was  afterwards  purchased  by 
the  plaintiff),  died  unmarried,  intestate,  and  with- 
out issue,  November  13th,  1866,  leaving  as  her  heirs 
at  law,  brothers  and  sisters,  one  of  whom  was  Wil- 
liam Pollock  (plaintiff's  vendee).  Upon  the  death 
of  Martha,  her  estate  vested  in  William  Pollock,  and 
the  other  heirs,  subject  to  the  collateral  inheritance 
tax.  November  9th,  1868,  said  Pollock,  by  John  B. 
Large,  his  attorney  in  fact,  sold  to  James  McClain, 
the  plaintiff,  the  said  tract  of  land,  containing  54 
acres,  in  fee,  by  deed  of  general  warranty  in  ordi- 
nary form,  using  the  words,  ^The  said  party  of  the 
first  part  in  consideration  of  $30,000,'  etc.,  *have 
granted,  bargained,  sold,'  etc.,  *and  by  these  pres- 
ents do  grant,  bargain,  sell,'  etc.,  Ho  the  said  party 
of  the  second  part,  his  heirs  and  assigns,'  the  said 
tract.  In  1869,  William  Pollock  died,  leaving  him 
surviving  him  as  heirs  at  law  Ann  M.  Power  and 
other  defendants  in  this  suit.  John  R.  Large,  the 
other  defendant,  was  duly  appointed  administrator. 

The  Collateral  Inheritance  Tax  was  ascertained 
about  November  1st,  1884,  with  twelve  per  cent,  inter- 
est from  November  13th,  1886,  and  fixed  at  $988.81. 
This  amount,  the  plaintiff,  under  protest  to  save  him- 
self from  execution  and  sale  of  said  property,  on 
November  20th,  1884,  paid  to  the  party  authorized  to 
collect  it  for  the  commonwealth.  The  heirs  of  Wil- 
liam Pollock  have  received  assets  from  his  estate, 


152 

real  and  personal  property,  far  in  excess  of  tlie 
amount  of  said  tax  paid  by  plaintiff. 

The  defendant  set  np,  by  way  of  defense,  that 
plaintiff  ^s  title  was  not  under  the  deed  of  Pollock, 
but  arose  under  proceedings  in  the  orphan's  court 
and  administrator's  deed  after  his  death;  but,  for 
reasons  appearing  in  the  notes  of  trial,  the  defenses 
was  declared  legally  insufficient,  and  the  juiy  in- 
structed to  find  a  verdict  for  plaintiff,  subject  to  the 
opinion  of  the  court  as  to  whether,  under  the  cove- 
nants in  the  deed  from  Pollock,  by  his  attorney  in 
fact,  to  plaintiff,  the  latter  had  a  right  to  recover 
in  this  suit  the  money  paid  by  him  as  collateral  in- 
heritance tax  which  was  a  lien  upon  the  property 
conveyed  by  said  deed.  The  plaintiff  contends  that 
the  words  *  grant,  bargain,  and  sell,'  in  the  deed  un- 
der the  act  of  twenty-eighth  of  May,  1715,  created  a 
covenant  against  incumbrances,  which  was  broken  as 
soon  as  made  by  this  lien,  and  that  plaintiff,  being 
compelled  to  pay  it  to  save  his  property,  has  a  right 
to  recover  it  in  this  suit.  Defendants  claim  that  the 
lien  for  the  tax  was  not  brought  about  by  the  act  of 
the  vendor;  but,  being  imposed  by  the  law  (subse- 
quent) to  the  vesting  of  the  title  in  him  by  descent, 
plaintiff  has  no  remedy  upon  the  covenant  arising  out 
of  the  words  *  grant,  bargain,  and  seU.' 

We  think  the  case  of  Shaffer  v.  Greer  (87  Pa.  St. 
370)  covers  this.  The  incumbrance  here  was  a  tax 
which  originated  with  the  title  of  plaintiff's  vendor, 
and  was  coincident  with,  or  as  between  him  and  his 
vendee,  the  plaintiff,  it  was  his  duty  to  see  it  paid. 
It  seems  to  us  that  it  would  be  giving  the  statute  too 
narrow  an  interpretation  to  hold  that  it  did  not  cover 
such  a  case  as  this.  It  does  not  appear  a  forced  con- 
struction to  say  that  he  suffered  a  charge  on  the  land 
during  his  title,  for  which,  as  between  him  and  his 
grantee,  he  was  bound  to  indemnify  him."  Large  v. 
McClain,  7  Atl.  Eep.  101. 


153 


CHAPTER  Vn. 
Tax  Payable  to  County  Treasurer — Receipt. 


235.  Section  Six.  _^ 

236.  Probate     Court     Cannot     Dis- 

charge Liability  of  Legal 
Representative  —  Must  Ap- 
peal to  Review  Appraise- 
ment. 


237.  Discharge    of    Probate    Court 

does  not  Discharge  Executor 
or  Administrator  from  Lia- 
bility. 

238.  Probate    Court    May    Demand 

Voucher  Showing  Payment. 


235.  Section  Six.  Every  sum  of  money  retained 
by  any  executor,  administrator  or  trustee, 
or  paid  into  his  hands  for  any  tax  on  any 
property,  shall  be  paid  by  him  ivithin 
thirty  days  thereafter  to  the  Treasurer  of 
the  proper  county,  and  the  said  Treasurer 
or  Treasurers  shall  give,  and  every  execu- 
tor, administrator  or  trustee  shall  take, 
duplicate  receipts  from  him  of  said  pay- 
ments, one  of  ivhich  receipts  he  shall  im- 
mediately send  to  the  State  Treasurer, 
whose  duty  it  shall  be  to  charge  the  Treas- 
urer so  receiving  the  tax  ivith  the  amount 
thereof,  and  shall  seal  said  receipt  ivith 
the  seal  of  his  office  and  countersign  the 
same  and  return  it  to  the  executor,  admin- 
istrator or  trustee,  ivhereupon  it  shall  be 
a  proper  voucher  in  the  settlement  of  his 
accounts;  but  the  executor,  administrator 
or  trustee  shall  not  be  entitled  to  credits 
in  his  accounts  or  be  discharged  from  lia- 
bility for  such  tax  unless  he  shall  pur- 
chase a  receipt  so  sealed  and  countersigned 
by  the  Treasurer  and  a  copy  thereof  certi- 
fied by  him. 


236.  Probate  Court  Cannot  Discharge  Liability  of 
Legal  Representative^Must  Appeal  to  Re- 
view Appraisement. 

No  executor  or  administrator  is  discharged  from  lia- 
bility miless  the  tax  is  paid  and  a  receipt  procured,  as 


154 

provided  by  statute.  An  objection  to  the  correctness  of 
the  appraisement  is  not  reviewable,  except  on  appeal. 
Matter  of  Hackett,  14  Misc.  Rep.  (N.  Y.)  282;  35  N.  Y.  S. 
1051. 

237.  Discharge  of  Probate  Court  Does  Not  Dig- 

charge    Executor   or  Admiuistrator    From 
liiability. 

If  the  Court  of  Probate  approves  a  final  account  and 
report  of  distribution,  and  by  order  declares  discharge 
of  executor  or  administrator,  the  order  is  of  no  effect  in 
relieving  the  administrator  or  executor  of  liability  for 
payment  of  Inheritance  Tax.  Blanchard  v.  Williamson, 
70  111.  647 ;  Dunaway  v.  Camphell,,  59  111.  App.  665. 

238.  Probate  Court  May  Demand  Voucher  Sboxir* 

ing  Payment. 

The  surrogate  has  power  to  compel  the  executor  or  ad- 
ministrator to  pay  the  tax  and  may  demand  receipt  show- 
ing payment.    Re  Jones,  5  Demarest^s  Rep.  30. 

The  County  Treasurer  is  the  officer  authorized  by  stat- 
ute to  collect  and  receipt  for  Inheritance  Taxes  and  in- 
terest.   See  *  ^  Forms  ^'  for  Inheritance  Tax  Receipts. 


155 


CHAPTER  VIII. 

Legal.  Representative  to  Make  Known  Property  Sub- 
ject TO  Tax. 

239.  Section  Seven.  "Whenever  any  of  the  real 
estate  of  ivhich  any  decedent  may  die 
seized  shall  pass  to  any  body  politic  or  cor- 
porate, or  to  any  person  or  persons,  or  in 
trust  for  them,  it  shall  be  the  duty  of  the 
executor,  administrator  or  trustee  of  such 
decedent  to  give  information  thereof  in 
writing  to  the  Treasurer  of  the  county 
-where  said  real  estate  is  situated,  within 
six  months  after  they  undertake  the  execu- 
tion of  their  expected  duties,  or,  if  the  fact 
be  not  know^n  to  them  within  that  period, 
then  within  one  month  after  the  same 
shall  have  come  to  their  knowledge. 


156 


CHAPTER  IX. 

Refund  of  Tax. 

240.  Section  Eight.  Whenever  debts  shall  be 
proved  against  the  estate  of  the  decedent 
after  distribution  of  legacies  from  which 
the  inheritance  tax  has  been  deducted  in 
compliance  with  this  act,  and  the  legatee 
is  required  to  refund  any  portion  of  the 
legacy,  a  proportion  of  the  said  tax  shall 
be  repaid  to  him  by  the  executor  or  admin- 
istrator if  the  said  tax  has  not  been  paid 
into  the  State  or  County  Treasurer,  or  by 
the  County  Treasurer  if  it  has  been  so  paid. 

(See  Section  10  for  comment  on  power  of  a  State  or 
Comity  officer  to  refund  tax.) 


157 


CHAPTER  X. 


Teansfek  of  Property  by  Corporation,  Bank,  Deposit 
Company,  Institution  or  Person. 


241.  Section  Nine. 

242.  Is  Constitutional. 

243.  Litigation    Involving    Section 

Nine. 

244.  Possession  and  Control  of  safe 

Deposit  Company. 

245.  Possession  and  Control  of  Safe 

Deposit  Company — Must  De- 
liver the  Contents  to  Owner 
— State  is  Part  Owner. 

246.  State's    Interest    in    Property 

Contained  in  a  Safety  De- 
posit Box. 

247.  Notice— State    Must    be    Ad- 

vised of  the  Contents  of  the 
Box.     State  a  Part  Owner. 

248.  Depositary   and   Safe   Deposit 

Company  not  Deprived  of 
Constitutional  Eight  by  Ee- 
quirement  of  Notice. 

249.  Depositary  has  Eemedy. 

250.  State  has  Interest  equal  in  de- 

gree to  beneficiary. 

251.  Interested  Parties  are  Entitled 

to  Knowledge  of  Contents 
of  Box. 

252.  Joint  Lessees— Co-PartnersMp 

Property — Constitutional. 


253.  State's  Eight  is  Fixed  at  the 

Time  of  the  Death  of 
Lessee. 

254.  Does  not  Impair  Obligation  of 

Charter  of  Safe  Deposit 
Company. 

255.  No  Delivery  until  Tax  is  Paid. 

256.  Safe  Deposit  Company  not  De- 

prived of  Property  and  Lib- 
erty Without  due  Process  of 
Law. 

257.  Depositary    Company    as    Tax 

Gatherer. 

258.  Unreasonable      Searches      and 

Seizures. 

259.  Property  of  safe  Deposit  Com- 

pany not  Subject  to  Public 
Use  without  Just  Compensa- 
tion. 

260.  Corporations  Liable  for  Trans- 

fer of  Stock. 

261.  Notice  —  Bank,  Custodian  of 

Money  or  Securities — ^Must 
give  the  Notice. 

262.  Will  and  Codicils  not  Property 

within  Section  Nine. 

263.  Transfer  —  what    Constitutes 

within  Meaning  of  Section 
Nine. 


241.  Section  Nine.  If  a  foreign  executor,  admin- 
istrator or  trustee  shall  assign  or  transfer 
any  stock  or  obligations  in  this  state  stand- 
ing in  the  name  of  a  decedent  or  in  trust 
for  a  decedent,  liable  to  any  such  tax,  the 
tax  shall  be  paid  to  the  Treasurer  of  the 
proper  county  on  the  transfer  thereof.  No 
Safe  Deposit  Company,  Trust  Company, 
corporation,  bank,  or  other  institution, 
person  or  persons,  having  in  possession  or 
under  control  securities,  deposits,  or  other 
assets  belonging  to  or  standing  in  the  name 
of  a  decedent  who  ivas  a  resident  or  non- 


158 

resident,  or  belonging  to  or  standing  in 
the  joint  names  of  such  a  decedent  and  one 
or  more  persons,  including  the  shares  of 
the  capital  stock  of,  or  other  interests  in, 
the  Safe  Deposit  Company,  Trust  Com- 
pany, corporation,  bank  or  other  institu- 
tion making  the  delivery  or  transfer  here- 
in provided,  shall  deliver  or  transfer  the 
same  to  the  executors,  administrators  or 
legal  representatives  of  said  decedent,  or 
to  the  survivor  or  survivors  when  held  in 
the  joint  names  of  a  decedent  d,nd  one  or 
more  persons,  or  upon  their  order  or  re- 
quest, unless  notice  of  the  time  and  place 
of  such  intended  delivery  or  transfer  be 
served  upon  the  State  Treasurer  and  At- 
torney General  at  least  ten  days  prior  to 
said  delivery  or  transfer;  nor  shall  any 
such  Safe  Deposit  Company,  Trust  Com- 
pany, corporation,  bank  or  other  institu- 
tion, person  or  persons,  deliver  or  trans- 
fer any  securities,  deposits  or  other  assets 
belonging  to  or  standing  in  the  name  of  a 
decedent,  or  belonging  to  or  standing  In 
the  joint  names  of  a  decedent  and  one  or 
more  persons,  including  the  shares  of  the 
capital  stock  of,  or  other  interests  in,  the 
Safe  Deposit  Company,  Trust  Company, 
corporation,  bank,  or  other  institution 
making  the  delivery  or  transfer,  Tvithout 
retaining  a  sufficient  portion  or  amount 
thereof  to  pay  any  tax  or  interest  which 
may  thereafter  be  assessed  on  account  of 
the  delivery  or  transfer  of  such  securities, 
deposits  or  other  assets,  including  the 
shares  of  the  capital  stock  of,  or  other  in- 
terests in,  the  Safe  Deposit  Company,  Trust 
Company,  corporation,  bank,  or  other  in- 
stitution making  the  delivery  or  transfer, 
under  the  provisions  of  this  article,  unless 
the  State  Treasurer  and  Attorney  General 


159 

consent  thereto  in  writing.  And  it  shall 
be  lawful  for  the  State  Treasurer,  together 
w^ith  the  Attorney  General,  personally  or 
by  representatives,  to  examine  said  securi- 
ties, deposits  or  assets  at  the  time  of  such 
delivery  or  transfer.  Failure  to  serve  such 
notice  or  failure  to  alloxir  such  examina- 
tion, or  failure  to  retain  a  sufficient  por- 
tion or  amount  to  pay  such  tax  and  inter- 
est as  herein  provided  shall  render  said 
Safe  Deposit  Company,  Trust  Company, 
corporation,  bank,  or  other  institution, 
person  or  persons,  liable  to  the  payment 
of  the  amount  of  the  tax  and  interest  due 
or  thereafter  to  become  due  upon  said  se- 
curities, deposits  or  other  assets,  including 
the  shares  of  the  capital  stock  of,  or  other 
interests  in,  the  Safe  Deposit  Company, 
Trust  Company,  corporation,  bank,  or 
other  institution  making  the  delivery  or 
transfer,  and  in  addition  thereto,  a  pen- 
alty of  one  thousand  dollars,  and  the  pay- 
ment of  such  tax  and  interest  thereon,  or 
of  the  penalty  above  prescribed,  or  both, 
may  be  enforced  in  an  action  brought  by 
the  State  Treasurer  in  any  court  of  compe- 
tent jurisdiction. 

242.  Is  Constitutional. 

Section  9  of  the  Inheritance  Tax  Law  of  1909  is  a  valid 
and  constitutional  enactment.  National  Safe  Deposit  Co, 
V.  Stead,  *250  111.  584-612. 

243.  Litigation  Involving  Section  Nine. 

The  National  Safe  Deposit  Company  of  Chicago  organ- 
ized under  the  laws  of  Illinois  for  the  purposes,  among 
others, 

^^of  providing  a  suitable  building  or  buildings  with 
vaults  and  safes,  with  a  special  regard  to  protection 


*Takeii  to  U.  S.  Supreme  Court  on  Writ  of  Error. 


160 

against  loss  by  fire,  robbery  or  otherwise,  and  to 
carry  on  the  business  of  safety  deposit  and  storage'' 

filed  a  bill  in  chancery  in  the  Circuit  Court  of  Cook 
County  to  restrain  the  Attorney-General,  State  Treas- 
urer, and  Inheritance  Tax  Attorney  from  enforcing  Sec- 
tion 9  against  said  company  and  all  other  corporations, 
firms,  and  individuals  similarly  situated  and  engaged  in 
renting  safes  and  deposit  boxes  for  hire,  on  the  ground 
said  act  was  unconstitutional  and  void.  A  general  de- 
murrer was  sustained  and  the  bill  dismissed  for  want  of 
equity  and  an  appeal  taken  to  the  Supreme  Court. 

The  Court's  decision  is  digested  as  follows : 

244.  Possession  and  Control  of  Safe  Deposit  Com- 

pany. 

A  corporation  organized  for  the  purpose  of  providing 
a  suitable  building  with  vaults  and  safes,  with  a  special 
regard  to  protection  against  loss  by  fire,  robbery  or  other- 
wise, and  to  carry  on  the  business  of  safety  deposit  and 
storage,  having  a  contract  or  contracts  with  individual 
or  joint  box  holders,  sustains  the  relation  of  bailee  to  such 
box  holders  or  box  renters,  and  is  in  control  and  posses- 
sion of  property  in  the  box,  notwithstanding  the  fact  that 
the  character  or  description  of  the  property  in  the  boxes 
is  unknown  to  the  depositary. 

245.  Possession  and  Control  of  Safe  Deposit  Com- 

pany— Must  Deliver  the  Contents  to  Own- 
er— State  is  Part  Owner. 

When  the  box  stands  in  the  individual  or  joint  name  of 
the  decedent,  it  is  the  duty  of  the  Safety  Deposit  Com- 
pany to  deliver  the  contents  of  said  box  to  those  persons, 
only,  to  whom  the  property  belongs.    The  State,  by  rea- 


161 

son  of  the  Inheritance  Tax  Law,  may  be  a  part  owner  of 
such  property. 

246.  State's  Interest  in  Property  Contained  in  a 

Safety  Deposit  Box. 

*Mt  is  clear  that  the  State  has  an  interest  in  every 
estate  that  is  subject  to  the  payment  of  an  Inherit- 
ance Tax,  and  in  all  such  proceedings  the  Attorney- 
General  or  some  other  designated  officer  is  the  repre- 
sentative of  the  State.'' 

247.  Notice — State  Must  be  Advised  of  the  Con- 

tents of  the  Box.     State  a  Fart  Oivner. 

When  a  lessee  of  the  Safety  Deposit  Company  dies, 
leaving  property  in  a  safety  deposit  box  in  the  posses- 
sion, or  control  of,  the  Safety  Deposit  Company  or  a  de- 
positary, the  State,  by  its  proper  representative,  has  the 
right  to  be  advised  whether  or  not  it  shall  ultimately  be 
established  that  it  has  an  interest  in  such  property,  and 
of  the  time  and  place  the  property  will  be  surrendered 
and  delivered  by  the  Safe  Deposit  Company  or  depos- 
itary to  the  personal  representative,  heir  or  devisee  of  the 
decedent,  for  the  purpose  of  being  informed  as  to  whether 
there  is  an  Inheritance  Tax  on  the  succession  to  the  prop- 
erty in  the  box. 

**If  such  were  not  held  to  be  the  law,  all  moneys, 
securities  or  other  valuables  held  by  appellant,  in  its 
safety  deposit  boxes  or  safes  for  its  lessees,  upon  the 
death  of  a  lessee  might  be  transferred  to  parties 
other  than  the  State  or  its  representatives  and  imme- 
diately removed  to  a  foreign  State  or  country,  or  con- 
cealed or  otherwise  disposed  of,  and  the  true  owner 
of  the  property  in  part — that  is,  the  State — ^be  de- 
prived of  all  right  to  enjoy  the  use  and  possession  of 
such  property.  It  therefore  legitimately  follows,  we 
think,  that  the  provisions  of  Section  9,  which  require 


162 

the  representative  of  the  State  to  have  notice  of  the 
time  when  the  property  held  *  *  *  is  to  be  sur- 
rendered and  removed  from  the  custody  of  the  Safe 
Deposit  Company  and  delivered  to  the  personal  rep- 
resentatives, heir  or  devisee  of  the  decedent,  are  not 
an  unreasonable  measure  to  protect  the  State  from 
loss  of  property  in  which  it  has  a  vested  right.*' 

248.  Depositary  and  Safe  Deposit  Company  not 

Deprived  of  Constitutional  Right  by  Re- 
quirement of  Notice. 

A  depositary  is  not  deprived  of  any  constitutional 
right  by  a  requirement  that  it  shall  give  notice  to  the 
State  authorities  when  and  where  the  transfer  of  prop- 
erty under  its  possession  or  control  is  to  be  transferred 
or  delivered. 

^'Nor  can  we  say  that  the  appellant  (Safe  Deposit 
Company)  will  be  deprived  of  any  of  its  constitu- 
tional rights  by  making  it  liable  for  the  amount  of 
the  Inheritance  Tax  in  case  it  violates  the  clear  man- 
date of  the  law,  and  parts  with  the  possession  of 
such  property  without  giving  notice  to  the  State  of 
such  removal  and  delivery,  or  in  being  penalized  for 
so  doing.'' 

249.  Depositary  Has  Remedy. 

**It  is  obvious,  should  doubts  arise  as  to  whether 
an  Inheritance  Tax  is  due  on  the  succession  of  prop- 
erty held  by  a  safety  deposit  company  whose  former 
owner  is  dead,  or  as  to  the  amount  of  such  tax,  the 
courts  will  always  be  open,  upon  the  application  of 
the  safety  deposit  company,  the  State  or  those  inter- 
ested, to  adjudicate  upon  such  questions  as  may  arise 
and  solve  the  doubt,  so  that  the  appellant's  expressed 
fear  that  it  might  be  wrongfully  required  to  pay  an 
inheritance  tax  upon  property  which  it  had  sup- 
posedly properly  surrendered  and  delivered,  or  be 
penalized  for  the  infraction  of  the  statute  and  mulct- 
ed in  costs,  is,  we  think,  a  groundless  fear." 


163 

250.  State  Has  Interest  Equal  to  Beneficiary. 

The  provisions  of  Section  9  requiring  the  Safe  De- 
posit Company  in  possession  or  control  of  property 
standing  in  the  name  of  the  deceased  lessee  or  lessees,  to 
give  notices  to  the  State  of  the  time,  when  and  where  it 
will  transfer  such  property,  and  penalizing  the  deposi- 
tary for  the  failure  to  comply  with  the  section  is  a  valid 
exercise  of  legislative  power. 

**The  appellant  has  no  more  right  under  the  Con- 
stitution (either  State  or  National)  to  ignore  the 
property  rights  of  the  State,  and  to  surrender  and 
to  deliver  the  property  *  *  *  to  the  heir  or  de- 
visee *  *  *  that  it  would  have  to  deliver  the 
same  to  the  State  in  exclusion  of  the  rights  of  the 
heir.  ^ ' 

251.  Interested  Parties  Are  Entitled  to  Knowl- 

edge of  Contents  of  Box. 

All  parties  in  interest  for  whom  the  appellant  holds 

property  are  entitled  to  be  informed  of  the  condition  and 

amount  of  such  property  so  found  in  safe  deposit  boxes 

or  safes,  before  the  depositary  parts  with  the  possession 

thereof. 

**This  would  be  the  law  which  would  govern  any 
other  bailee  under  like  circumstances,  if  the  statute 
had  not  been  enacted,  and  we  think  no  valid  reason 
is  or  can  be  assigned  why  such  should  not  be 
held  to  be  the  law  in  view  of  said  statute  governing 
safety  deposit  companies.'' 

252.  Joint     Lessees-^Go-Partnership     Property- 

Constitutional. 

The  provisions  of  Section  9  concerning  property  stand- 
ing in  the  joint  name  or  names  of  one  or  more  persons, 
governs  joint  lessees  of  a  box,  and  property  standing  in 
the  name  of  a  co-partnership. 

**  There  is  no  constitutional  objection  to  the  en- 


164 

f  orcement  of  the  statute  as  to  property  owned  jointly 
by  a  deceased  lessee  and  another  and  deposited  in  a 
safety  deposit  box  or  safe,  where  the  property  of  the 
several  lessees  has  not  been  commingled  by  the  acts 
of  the  parties  but  has  been  kept  separate. 

If  it  be  borne  in  mind  that  the  co-partnership  by 
the  death  of  the  co-partner  is  dissolved,  and  that  while 
the  assets  may  be  lawfully  retained  by  the  surviving 
member  or  surviving  members  of  the  co-partnership, 
they  ultimately  must  account  to  the  personal  repre- 
sentative of  the  deceased  partner  for  his  share,  and' 
that  the  inheritance  tax  will  only  be  assessed  upon 
the  succession  to  what  may  remain  after  the  partner- 
ship debts  are  paid,  it  must  be  held  that  the  statute 
applies  to  the  co-partnership  lease,  and  to  co-part- 
nership assets.  We  can  see  no  objection  to  the  per- 
sonal representative  of  the  deceased  partner  and  all 
other  persons  who  have  or  will  have  an  interest  in  his 
estate  (which  would  include  the  State),  being  in- 
formed as  to  the  amount,  character  and  value  of  the 
co-partnership,  safety  deposit  box  or  safe,  at  the 
time  of  the  dissolution  of  the  partnership  by  death 
of  a  partner. ' ' 

253.  State's  Right  is  Fixed  at  the  Time  of  the 

Death  of  Lessee. 

''The  State  has  a  vested  financial  right  in  the  es- 
tate of  every  decedent  in  this  State,  which  is  subject 
to  the  payment  of  an  Inheritance  Tax,  and  that  right 
is  equal  in  degree  to  that  of  the  personal  representa- 
tive, heir  or  devisee  of  the  decedent,  and  it  vests  at 
the  same  moment  of  time  that  the  interest  of  the 
personal  representative,  heir  or  devisee  vests.'' 

254.  Does  not  Impair  Obligation  of  Charter  of 

Safe  Deposit  Company. 

Where  a  charter  of  a  safe  deposit  company  provides 
for  the  business  of  erecting  and  maintaining  a  suitable 
building  with  vaults  and  safes  for  the  protection  of  prop- 


165 

erty  against  fire,  robbery  and  otherwise,  the  provisions 

of  Section  9  in  no  way  effect  such  rights. 

**A  law  which,  in  fact,  only  requires  that  the  ap- 
pellant shall  not  without  notice  to  the  State,  deliver 
the  property  which  it  has  received  into  its  vaults 
where  the  owner  or  part  owner  of  such  property 
has  died  since  its  receipt  by  the  appellant,  and,  if  it 
is  subject  to  an  Inheritance  Tax,  not  deliver  the 
same,  without  consent  of  the  State,  until  the  tax  is 
paid,  (cannot)  rightfully  be  said  to  infringe  upon 
the  charter  rights  of  the  appellant.'' 

255.  No  Delivery  until  Tax  is  Paid. 

**In  short,  that  Section  9  provides,  first,  for  the 
determination  of  the  question.  Is  the  property  sub- 
ject to  an  Inheritance  Tax?  and  if  it  is,  that  it  must 
be  paid  before  the  appellant  can  rightfully  part  with 
the  possession  of  the  property. ' ' 

256.  Safe    Deposit    Company    not    Deprived    of 

Property  and  Liberty  ivithout  Due  Process 
of  Ijaiv. 

'*  Having  heretofore  reached  the  conclusion  that  a 
safety  deposit  company  is  in  possession  and  control 
of  the  securities  and  other  valuables  delivered  to  it 
by  its  lessees,  and  that  the  relation  of  bailee  and 
bailor  exists  between  the  safety  deposit  company  and 
its  lessee,  and  that  upon  the  contingency  of  the  death 
of  a  lessee  who  is  an  owner  in  whole  or  in  part,  of 
property  in  the  possession  of  the  safety  deposit  com- 
pany, the  safety  deposit  company  may  rightfully  hold 
such  deposit,  and  must  hold  it,  until  it  can  deliver 
it  to  the  true  owner,  and  that  the  State  is  a  part 
owner  of  the  deposit  in  case  it  is  subject  to  the  pay- 
ment of  an  Inheritance  Tax,  we  think  by  the  terms 
of  Section  9,  the  appellant's  right  of  contract  is  not 
infringed  upon  and  that  it  is  not  deprived  of  liberty, 
property  or  the  due  protection  of  the  law." 

257.  Depositary  Company  as  Tax  Gatherer. 

The  objection  to  Section  9  that  appellant  is  made  a 


166 

trustee  and  tax  gatherer  without  its  consent  is  not  ten- 
able. 

^^The  appellant  is  not  a  trustee  in  the  ordinary- 
sense,  but  a  bailee,  and  the  fact,  if  it  were  a  fact, 
that  it  is  used,  in  part,  as  a  tax-assessing  and  tax- 
collecting  officer  would  not  invalidate  the  statute. 
Numerous  statutes  have  been  passed  by  the  Legisla- 
tures of  this  and  other  States  which  require  banks, 
trustees,  executors,  administrators  and  agents  to  re- 
turn for  taxation  property  in  their  possession,  and 
such  statutes  frequently  provide  that  if  the  banks, 
trustees,  executors,  administrators  and  agents  hold- 
ing such  property  surrender  the  same  without  the 
tax  thereon  being  paid,  they  shall  be  liable  for  the 
tax  {Walton  v.  Weshvood,  73  111.  125;  Ottawa  Glass 
Co.  V.  McCaleh,  81  id.  556;  Lochwood  v.  Johnson,  106 
id.  334;  Warren  v.  Cook,  116  id.  199;  People's  Loan 
S  Homestead  Ass'n  v.  Keith,  153  id.  609;  Scott  v. 
People,  210  id.  594.)  In  many  instances  the  corpora- 
tions have  been  made  collecting  officers  by  being  re- 
quired to  deduct  the  taxes  from  the  stockholders '  in- 
terests and  pay  them  over  to  the  State.  {Haight  v. 
Pittsburgh,  Ft.  Wayne  S  Chicago  R.  R.  Co.,  73  U.  S. 
15 ;  United  States  v.  Baltimore  S  Ohio  R.  R.  Co.,  84 
id.  322 ;  National  Bank  v.  Commonwealth,  76  id.  353 ;. 
Minot  V.  Philadelphia  W.  S  B.  R.  R.  Co.,  52  Pa.  140.) 
In  Citizens'  National  Bank  v.  Kentucky,  217  U.  S. 
445,  the  revenue  law  of  Kentucky,  which  charged  the 
banks  with  the  duty  of  collecting  the  taxes  or  shares, 
was  sustained.  Mr.  Cooley,  in  his  work  on  taxation 
(Vol.  2,  3rd.,  p.  832),  in  discussing  this  subject  says : 
'  For  the  most  part,  the  taxes  levied  by  the  State  are 
collected  of  the  persons  taxed  or  enforced  against  the 
property  in  respect  to  which  they  are  imposed.  In  a 
few  cases,  however,  in  which  such  a  course  could  not 
work  injustice,  the  State  may  reach  the  party  taxed 
by  indirection,  and  collect,  in  the  first  instance, 
from  some  one  else,  who  in  turn  will  become  col- 
lector from  the  person  on  which  the  tax  is  really  im- 
posed. The  reason  for  this  is  that  in  such  cases  it  is 
more  convenient  to  the  State  and  perhaps  makes 
more  certain  the  collection  and  it  could  be  resorted 


167 

to  only  wlien  the  case  is  such  that  injustice  could  re- 
sult to  no  one.  A  case  of  the  kind  is  where  a  tax  is 
imposed  on  the  dividends  or  other  receipts  of  share- 
holders from  the  profits  of  corporations,  or  upon 
their  shares,  or  upon  the  interest  paid  by  indebted 
corporations,  and  where  the  corporation  is  required 
to  make  the  payment,  which  it  would  then  deduct 
from  the  payment  to  be  made  to  shareholders  or  to 
the  holders  of  the  evidences  of  indebtedness.  There 
is  no  doubt  of  the  right  to  do  this,  except  as  pay- 
ments to  be  made  to  non-residents,  nor  even  as  to 
them  if  the  statute  under  which  their  interests  were 
acquired  provided  for  the  levying  and  collecting  of 
taxes  in  that  manner.  Other  instances  are,  where  a 
tax  is  required  under  a  lease,  the  amount  of  which 
tax  may  be  deducted  from  the  rent,  or  where  the  per- 
son having  custody  of  distilled  spirits  is  obliged  to 
pay  the  tax  thereon,  he  being  given  a  lien  on  them 
for  what  he  so  pays. '  We  conclude  the  appellant  is 
not  deprived  of  its  liberty,  property  or  due  protec- 
tion of  the  law  or  wrongfully  made  a  trustee  or  tax- 
gathering  agent  against  its  will.'' 

258.  Unreasonable   Searches  and  Seizures. 

The  provisions  of  Section  9  do  not  effect  an  unreason- 
able search  and  seizure  of  property  in  safety  deposit 
boxes  or  in  the  hands  of  a  depositary. 

259.  Property  of  Safe  Deposit  Company  not  Sub- 

ject to  Public  Use  without  Just  Compen- 
sation. 

Section  9  effects  no  infringement  upon  the  constitu- 
tional provision,  either  State  or  National,  which  forbids 
property  to  be  taken  for  public  use  without  just  compen- 
sation. 

**In  the  very  nature  of  things,  in  the  settlement 
of  estates  of  deceased  persons,  there  must  be  some 
delay  in  determining  who  is  entitled  to  receive  the 
estate,  and  as  we  have  heretofore  held,  when  the  ap- 
pellant leases  its  safety  deposit  boxes  and  safes,  it 


168 

and  its  lessees  must  necessarily  have  contracted  with 
reference  to  the  inevitable  fact  that  some  of  its  les- 
sees will  die  pending  the  continuation  of  their  leases. 
This  being  true,  we  think  it  manifestly  follows  that 
appellant 's  leases  are  made  and  the  rent  therefor  is 
fixed  upon  the  contingency  that  in  case  of  the  death 
of  a  lessee  pending  the  lease,  there  will  be  some  de- 
lay in  the  delivery  of  the  property  of  the  lessee  to 
the  true  owner/' 

260.  Corporations  Liable  for  Transfer  of  Stock. 

Corporations  which  transfer  stock  standing  in  the 
name  of  a  non-resident  decedent  do  so  at  their  peril,  until 
tax  is  paid.    Matter  of  Romaine,  127  N.  Y.  80. 

261.  Notice— Bank,  Custodian    of    Money  or  Se- 

curities—Must Give  the  Notice. 

**  Where  a  bank  refused  to  turn  over  the  account  of  a 
decedent  to  his  executor  on  the  ground  that  said  executor 
had  not  given  the  required  notice  of  such  withdrawal  to 
the  State  comptroller,  Held,  that  under  Section  228,  Chap- 
ter 908,  Laws  1896  (N.  Y.)  and  as  amended  by  L.  1902, 
Chapter  101,  the  obligation  to  give  notice  to  the  State 
comptroller  of  the  delivery  or  transfer  of  deposits,  etc., 
rests  upon  the  bank,  not  the  executor;  and  that  the  fail- 
ure of  the  bank  to  perform  its  duty  in  this  respect  im- 
posed by  the  statute  cannot  affect  the  right  of  the  ex- 
ecutor to  recover.''  Fallows  on  Coll.  Inh.  &  Transfer 
Tax  Law  of  N.  Y.  366,  citing  Rathhone  v.  Bank  of  Metrop- 
oliSy  N.  Y.  Law  Journal,  June  15th,  1904. 

262.  Will  and  Codicils  not  Property  within  Sec- 

tion Nine. 

The  last  will  and  testament  and  codicils  of  decedent 
are  not  included  within  the  meaning  of  **  securities,  de- 
posits or  other  assets,"  and  therefore  are  not  compre- 


169 

bended  by  Section  9  of  tbe  Inberitanee  Tax  Law  (Illi- 
nois). No  notice  need  be  served  prior  to  tbeir  de- 
livery to  tbe  person,  corporation  or  Court  entitled  to  tbe 
possession  tbereof,  nor  is  a  consent  necessary  to  permit 
its  delivery.  Attorney-GeneraPs  (Illinois)  Opinions, 
1910,  page  935. 

263.    Transfer — ^What  Constitutes  within  Meaning 
of  Section  Nine. 

If  a  deposit  company  or  otber  institution  or  person 
delivers  to  a  joint  box  bolder,  user,  surviving  partner  or 
otber  person  a  box  or  property  for  examination,  witbin 
or  witbout  tbe  vault  or  office  of  tbe  person  or  company, 
and  an  inspection  or  examination  is  made  witbout  a  rep- 
resentative of  tbe  deposit  or  otber  company,  institution 
or  person  being  present  during  tbe  entire  time,  no  notice 
baving  been  given  to  tbe  Attorney-General  and  State 
Treasurer  of  tbe  time  and  place  of  sucb  examination,  tbe 
company  bas  made  a  transfer  probibited  by  statute  and 
is  liable  for  a  penalty  of  $1,000.00  and  tbe  tax  and  inter- 
est on  tbe  decedent's  property. 


170 


CHAPTER  XI. 


Refund  of  Tax. 


264.  Section  Ten. 

265.  County  Treasurer — Cannot  Ee- 

fund. 

266.  State    Treasurer — Cannot    Ee- 

fund  without  Appropriation. 

267.  Eefund     by     State — ^Payment 

must   have  been  under  Du- 
ress or  Compulsion. 

268.  Eefunds  —  When      Court      of 


Claims  Awarded  Claim  for 
Eefund  or  Erroneous  Pay- 
ment. 

269.  State  Auditor. 

270.  Interest — Cannot     be     Eecov- 

ered  on  Eefund. 

271.  Interest — Cannot     be     Eecov- 

ered  against  the  State  of 
Iowa  on  Eefunds. 

272.  State's  Duty— Eefunds. 


264.  Section  Ten.    When  any  amount  of  said  tax 

shall  have  been  paid  erroneously  to  the 
state  treasury,  it  shall  be  lawful  for  him 
on  satisfactory  proof  rendered  to  him  by 
said  county  treasurer  of  said  erroneous 
payments  to  refund  and  pay  to  the  execu- 
tor, administrator  or  trustee,  person  or 
persons  who  have  paid  any  such  tax  in  er- 
ror the  amount  of  such  tax  so  paid: 
Provided,  that  all  applications  for  the 
repayment  of  said  tax  shall  be  made  with- 
in two  years  from  the  date  of  said  pay- 
ment. 

265.  County  Treasurer^ — Cannot  Refund. 

People  V.  Griffith,  245  111.  532. 


The  Supreme  Court  in  People  v.  Griffith,  245  111.  532, 

in  reversing  an  order  of  tlie  County  Court  ordering  the 

County  Treasurer  to  refund  the  tax,  held: 

*^We  don't  think  it  was  the  intention  of  said  Sec- 
tion 10  that  the  County  Treasurer  should  be  author- 
ized thereunder  to  repay  taxes  erroneously  paid  to 
him.  Clearly,  under  that  section,  it  was  only  in- 
tended that  the  State  Treasurer,  upon  proper  proof, 
should  refund  such  amounts.  The  provision  of  the 
order  of  the  County  Court  requiring  the  Comity 


171 

Treasurer  to  refund  the  money  in  question  was  not 
in  accordance  with  this  law.  The  order  in  that  re- 
spect should  have  left  appellees  free  to  pursue  such 
remedies  as  they  might  deem  proper  and  effective 
for  the  recovery  of  the  money  erroneously  paid  to 
the  County  Treasurer  and  by  him,  as  we  must  as- 
sume, paid  to  the  State  Treasurer/' 

266.  State    Treasurer^ — Cannot    Refund    ivithout 

Appropriation. 

If,  according  to  People  v.  Grifiith,  supra,  the  State 
Treasurer  has  the  power  to  refund  erroneous  payments, 
yet  he  cannot  pay  out  money  unless  an  appropriation  is 
made  to  him  by  the  Legislature  providing  for  such  re- 
payments.    (Attorney-General's  Opinion — post.) 

The  proper  method  for  securing  refund  of  erroneous 
payment  of  Inheritance  Tax  where  the  State  Treasurer 
has  no  appropriation  therefor,  is  a  suit  in  the  Court  of 
Claims,  pursuant  to  the  law  as  therein  provided. 

267.  Refund  by  State — Payment  Must  Have  Been 

under  Duress  or  Compulsion. 

It  is  a  well-established  principle  of  law  in  Illinois  that 
there  can  be  no  recovery  back  of  taxes  erroneously  or 
illegally  paid,  unless  the  same  were  paid  under  actual 
duress  or  compulsion.  (Yates  v.  Insurance  Co,,  200  111. 
202,  and  cases  cited.)  Griffith,  Ex.,  v.  State  of  Illinois, 
Court  of  Claims,  decision  1910.* 

268.  Refunds— When   Court  of   Claims  Awarded 

Claim  for  Refund  of  Erroneous  Payment. 

In  a  suit  against  the  State,  brought  in  the  Court  of 
Claims,  Jennie  Sanford  Griffith,  executrix  of  the  estate 
fo  Merritt  E.  Sanford,  deceased,  was  allowed  the  sum  of 


•Opinion  of  court  given  in  full,  post  pages  418-419. 


172 

$497.09,  being  the  amount  claimed  by  her  as  an  erroneous 
payment  of  Inheritance  Taxes  to  the  Comity  Treasurer 
of  Cook  County  pursuant  to  an  order  of  tax  of  the  County 
Judge  of  Cook  County,  in  an  appraisement  of  the  Sanf  ord 
estate  under  the  Law  of  1895.  Executrix  appealed  from 
said  order  of  tax  to  the  County  Court,  where  the  order 
of  the  County  Judge  was  reversed,  and  the  County  Treas- 
urer was  directed  to  refund  $497.09  as  an  erroneous 
payment.  The  County  Treasurer  refused  payment  and 
on  the  Attorney-General's  appeal  to  the  Supreme  Court 
the  refusal  of  the  County  Treasurer  was  sustained  and 
the  order  of  the  County  Court  reversed.  (See  People  v. 
Griffith,  245  111.  532.)  The  Supreme  Court  held  that 
even  though  the  payment  was  erroneous,  Section  10  does 
not  provide  for  the  County  Treasurer  to  make  the  re- 
fund, but  that  the  State  Treasurer  has  the  power  to 
make  repayment. 

Executrix  thereupon  filed  her  suit  in  the  Court  of 
Claims  and  same  was  allowed.  Griffith,  Ex,,  v.  State  of 
Illinois,  Court  of  Claims  (supra), 

260.     State  Auditor. 

Cannot  draw  warrant  on  State  Treasurer  for  amount 
of  an  erroneous  payment  unless  appropriation  has  been 
made  to  cover  repayments.  Attorney-GeneraPs  Opin- 
ions, post. 

270.  Interest— Cannot  be  Recovered  on  Refund. 

Board  of  Highivay  Com'rs,  Bloomington  Tp.,  v. 
City  of  Bloomington,  97  N.  E.  (111.)  280. 

271.  Interest — Cannot  be  Recovered  against  tbe 

State  of  Iowa  on  Refunds. 

The  Inheritance  Tax  provision  for  the  refunding  of 
taxes  where  an  overpayment  was  made  by  the  tax  payer, 


173 

does  not  justify  the  State  in  allowing  interest  upon  said 
overpayment.  The  statute  creates  no  liability  against  the 
State  of  Iowa  for  the  use  of  the  money.  Upon  a  proper 
showing  it  is  made  the  duty  of  certain  officers  to  order 
and  issue  warrant  upon  the  Treasurer  of  the  State  to  re- 
fund such  taxes.  No  authority  is  conferred  upon  any 
public  officer  to  order  or  issue  a  warrant  for  any  amount 
as  interest.    Wieting  v.  Morrow,  132  N.  W.  193. 

272.     State's  Duty— Refunds. 

It  should  be  the  duty  and  policy  of  the  State  to  refund 
money  erroneously  taken  in  taxation  with  the  same 
promptitude  that  it  is  paid,  when  the  citizen  establishes 
his  right  to  repayment  by  those  rules  of  procedure  and 
law  necessary  to  develop  and  record  the  facts  upon 
which  the  claim  is  based,  thereby  giving  protection  to  the 
government  from  fraud. 


174 


CHAPTEE  XII. 
Appraisers  and  Appraisement. 


273.  Section  Eleven. 

274.  Tax  Proceeding  is  One  at  Law. 

275.  County    Judge    Appoints    Ap- 

praiser —  Appeal  lies  to 
County  Court — The  State  is 
an  Interested  Party  and  is 
Eepresented  by  the  Attor- 
ney General — Appeal  Lies 
to  the  Supreme  Court. 

276.  County    Judge    must    Appoint 

Appraiser — Mandamus  may 
be  Invoked. 

277.  County    Judge — Has    Original 

Jurisdiction  to  fix  the  Tax. 

278.  County  Judge  is  Assessing  and 

Taxing  Officer. 

279.  County     Judge — Is     Made     a 

Taxing  Officer — ^Fixes  tax 
^*As  of  Course.^'  Is  a  Spe- 
cial System  of  Taxation. 

280.  County  Judge — Order   of   Tax 

must  be  Entered  * 'Forth- 
with.** Objection  to  order 
cannot  then  be  made. 

281.  County  Court — Has  Power  to 

Determine  all  Questions  Ee- 
lating  to  Taxation. 

282.  County  Court — Construction  of 

Will  Conclusive  only  as  to 
Taxation. 

283.  When    State    not    Bound    by 

Construction  of  Will. 

284.  County     Judge     has    Original 

Jurisdiction  to  Determine 
Tax. 

285.  Appraiser. 

286.  Commission  to  Take    Evidence. 

287.  May  Compel  Witness  to  Tes- 

tify. 

288.  Not    Concluded    from    Taxing 

Property  Escaping  Taxation 
Because  of  Executor's  Claim 
it  was  not  Part  of  Estate. 

289.  Order  of  Tax — is  Final  as  to 

Property  Involved. 

290.  Order   of   Tax  is   Final   when 

not  Appealed  from. 

291.  Order  of  Tax  Cannot  be  Modi- 

fied except  by  Appeal — Ex- 
cessive Valuation  not  Ee- 
viewable  on  Petition. 


292.  Order  of  Tax  is  Final. 

293.  Order  of  Tax  is  Final  and  Ee- 

appraisement       cannot       be 
made. 

294.  Order  of  Tax  is  Final  and  can 

Only   be   Eeviewed   by   Ap- 
peal. 

295.  Cannot  Amend  Order   Assess- 

ing Tax. 

296.  Can  Amend  or  Correct  Order 

without  Appeal. 

297.  Cannot  Eeverse  Order  of  Tax 

on  Motion. 

298.  Order  of  Tax  is  a  Decree  or 

Order  of  Court. 

299.  Subrogate   Acts   Judicially   in 

Entering  Order   of  Tax. 

300.  Notice    of    Tax — Presumption 

of  Service  by  County  Judge. 

301.  County     Judge — Must     Enter 

Order    According    to    Direc- 
tion of  Court  of  Eeview 

Appeal  Cannot  be  Taken  in 
Piece-meal. 

302.  Appraisement    and    Appraiser. 

303.  Appraiser  Fees. 

304.  Expenses    and   Disbursements. 

305.  Legal   Counsel   for   Appraiser. 

306.  Service  is  Had  by  Notice. 

307.  Appraisement     must     Proceed 

under  Section  Eleven  of  the 
Ilinois  Law. 

308.  Inventory — State  has  Eight  to 

Compel  Filing. 

309.  Appraisement. 

310.  Practice     and     Procedure   — 

Which  Law  Governs. 

311.  Contingent  Estates — All  Prop- 

erty Appraisable — Tax  Post- 
poned. 

312.  Eesidence — Appraiser  May  De- 

termine. 

313.  Appraiser — Surrogate  May  Ap- 

point before  Claims  are  As- 
certained. 

314.  Appraiser       Cannot       Decide 

Question  of  Law. 

315.  Appraiser— May      Hear     Evi- 

dence on  Deductions. 


175 


316.  Evidence — Presumption  in  Ab- 

sence of  Proof  of  Jurisdic- 
tional Facts. 

317.  Evidence — Proof  must  Clearly 

Identify  Property  Alleged 
to  have  been  Transferred 
by  Death. 

318.  Evidence — Presumption   When 

Deposit  in  Name  of  Hus- 
band and  Wife. 

319.  Evidence — Must  Show  Income 

Reversed. 

320.  Joint  Stock  Association — Real 

Estate  to  be  Considered  in 
Valuation. 

321.  Appraiser ^Report    May    be 

Returned  for  Additional 
Proof. 

322.  Appraisement  —  Second     Ap- 

praisal not  Permissible  to 
Increase  Value  of  Assets. 

323.  Increase  or  Decrease  in  Value 

after  Death  not  Material. 

324.  Appraisement — Title    of    Case 

Must  be  in  Name  of  Donor 
of  Power. 

325.  Appraisement  —  Property    not 

Included  in  Appraisement 
can  be  subsequently  ap- 
praised. 

326.  Appraiser — If    in    Doubt    Re- 

ports Property  Taxable. 

327.  Appraiser — Duty   Ended   with 

Report. 

328.  Misappropriation   of  Property 

by  Executor  does  not  Re- 
lieve from  Taxation  as  of 
Death  of  Decedent. 

329.  Market    Value — ^Fixed    as    of 

date  of  Death. 

330.  Fair     Market     Value — Listed 

Stocks,  etc. 

331.  Market    Value — Public     Sales 

of  Securities. 

332.  Market  Value  —  Synonymous 

with  True  Value. 

333.  Market     Value  —  Fixed     at 

Transfer  or  Whenever  As- 
certainable. 

334.  When  no  Market  Value — Act- 

ual Value  is  Taken. 

335.  Market    Value — Isolated    Rec- 

ord Sales  do  not  Determine. 

336.  Market     Value — Where     Evi- 

dence of  sales  is  not  Contra- 
dicted or  rebutted,  such  Evi- 
dence must  Prevail. 


337.  Market  Value — Good  Will  can 

be  Taken  into  Account  in 
Determining  Market  Value. 

338.  Range  of  Market. 

339.  Deductions — in  General. 

340.  Amount    of   Administration 

Fees  Allowed. 

341.  Attorney's    Fees    and    Execu- 

tor's Commissions  for  Ad- 
ministration and  Defending 
Will — Claims  of  Non-resi- 
dents. 

342.  Deductions  must  be  Presented 

at  Appraisement — not  after- 
ward. 

343.  A 11  o  w  a  n  c  e    of    Decedent's 

Debts. 

344.  Commissions  of  Administrator. 

345.  Commissions  of  Administrator 

May  be  Estimated. 

346.  Expenses   of   Administration. 

347.  Real    Estate    Taxes — Deducti- 

ble. 

348.  General    Revenue    Taxes 

Charged  to  Real  Estate 
should  be  deducted. 

349.  General    Revenue    Tax — ^When 

not  Deductible  in  an  ap- 
praisement. 

350.  Trustees — Commissions  not  De- 

ductible. 

351.  Deductions  —  Mortgages    not 

Deductible  from  Personalty. 

352.  Inheritance  Tax — Not  Deduct- 

ible. 

353.  Deductions — ^Inheritance  Tax. 

354.  Burial  Lot — When  Cost  is  De- 

ductible. 

355.  Deductions — Second   Appraise- 

ment— Assets  Increased  by 
Defeating  Claims  against 
Estate. 

356.  Doubtful  Deductions  rejected. 

357.  Deduction — Note  in  Litigation. 

358.  Deductions — Legal  Services  for 

Construction  of  Will. 

359.  Deductions — Expenses  of  Liti- 

gation between  Distributors 
not  Deductible. 

360.  Ante-nuptial  Contract  does  not 

Create  an  Indebtedness  of 
the  Estate. 

361.  Debts  of  Non-resident   Estate 

— What  Deductible  from 
New  York  Assets. 

362.  Deductions — Pro  Rates  in  Non- 

resident Estates. 


176 


363.  Debts— When     Chargeable     to 

Assets  at  Domicile  of  Non- 
resident Deductions  should 
be  Proportioned. 

364.  Apportionment    of    debts    be- 

tween Exempt  and  Non-ex- 
empt Property. 

365.  When  one  Co-tenant  Furnishes 

money  for  Improvements. 

366.  Appeal — C  o  u  n  t  y    Judge    to 

County  Court. 

367.  County     Court     to     Supreme 

Court. 

368.  Practice  in  Cook  County,  Illi- 

nois. 


369.  Appeal  —  DeNovo  —  Common 

Law  Proceeding — ^Bill  of  Ex- 
ceptions. 

370.  Notice    of    Appeal — Attorney 

for  State  Comptroller  cannot 
Waive  and  Confer  Jurisdic- 
tion. 

371.  Appeal. 

372.  Appeal — is    Necessary    to    Ee- 

view  Correctness  of  Assess- 
ment— Deductions  must  be 
Presented  to  Appraiser. 

373.  Executor  may  Appeal. 

374.  United   States  Supreme   Court 

—  When  Construction  of 
State  Court  will  be  Followed. 


273.  Section  Eleven.  In  order  to  fix  the  value  of 
property  of  persons  whose  estate  shall  be 
subject  to  the  payment  of  said  tax,  the 
County  Judge,  on  application  of  any  inter- 
ested party,  or  upon  his  oivn  motion,  shall 
appoint  some  competent  person  as  ap- 
praiser as  often  as  or  v^henever  occasion 
may  require,  whose  duty  it  shall  be  forth- 
with to  give  such  notice  by  mail,  to  all 
persons  known  to  have  or  claim  an  inter- 
est in  such  property,  and  to  such  persons 
as  the  County  Judge  may,  by  order  direct, 
of  the  time  and  place  he  will  appraise 
such  property,  and  at  such  time  and  place 
to  appraise  the  same  at  a  fair  market 
value,  and  for  that  purpose  the  appraiser 
is  authorized,  by  leave  of  the  County 
Judge,  to  use  subpoenas  for  and  to  com- 
pel the  attendance  of  witnesses  before 
him,  and  to  take  the  evidence  of  such  wit- 
nesses under  oath  concerning  such  prop- 
erty and  the  value  thereof,  and  he  shall 
make  a  report  thereof  and  of  such  value  in 
writing,  to  said  County  Judge,  with  the 
depositions  of  the  w^itnesses  examined  and 
such  other  facts  in  relation  thereto  and  to 
said  matters  as  said  County  Judge  may,  by 
order  require  to  be  filed  in  the  ofiice  of  the 
Clerk  of  said  County  Court,  and  from  this 


177 

report  the  said  County  Judge  shall  forth- 
-with.  assess  and  fix  the  then  cash  value  of 
all  estates,  annuities  and  life  estates  or 
terms  of  years  growing  out  of  said  estate, 
and  the  tax  to  which  the  same  is  liable, 
and  shall  immediately  give  notice  by  mail 
to  all  parties  knoAvn  to  be  interested 
therein.  Any  person  or  persons  dissatis- 
fied ivith  the  appraisement  or  assessment 
may  appeal  therefrom  to  the  County  Court 
of  the  proper  county  ivithin  sixty  days 
after  the  making  and  filing  of  such  ap- 
praisement or  assessment  on  paying  or 
giving  security  satisfactory  to  the  County 
Judge  to  pay  all  costs,  together  with  w^hat- 
ever  taxes  shall  be  fixed  by  said  court. 
The  said  appraiser  shall  be  paid  by  the 
County  Treasurer  out  of  any  funds  he  may 
have  in  his  hands  on  account  of  the  in- 
heritance tax  collected  in  said  appraise- 
ment, as  by  law  provided,  on  the  certifi- 
cate of  the  County  Judge,  such  compensa- 
tion as  such  Judge  may  deem  just  for  said 
appraiser's  services  as  such  appraiser,  not 
to  exceed  ten  dollars  per  day  for  each  day 
actually  and  necessarily  employed  in  said 
appraisement,  together  w^ith  his  actual 
and  necessary  traveling  expenses  and  dis- 
bursements, including  such  witness  fees 
paid  by  him. 


274.     Tax  Proceeding  is  One  at  Law. 

The  proceeding  for  the  assessment  of  an  Inheritance 
Tax  '4s  a  special  statutory  one.''  People  v.  Mills,  247 
ni.  621. 

The  tax  proceeding  is  not  one  in  equity  but  is  gov- 
erned by  the  rules  in  law  actions.  People  v.  Sholem,  238 
ni.  203. 


178 

275.  County  Judge  Appoints  Appraiser — ^Appeal 
Lies  to  County  Court — The  State  is  an  In- 
terested Party  and  is  Represented  by  the 
Attorney-General^Appeal  Lies  to  the 
Supreme  Court. 

**  Jacob  Sholem  died  testate  in*  Paris,  Illinois, 
March  1st,  1907,  leaving  certain  property.  August 
19tli,  1907,  on  petition  of  the  Attorney  General,  the 
County  Judge  of  Edgar  County  appointed  an  Ap- 
praiser to  appraise  the  estate  of  said  deceased  un- 
der the  Inheritance  Tax  Law.  After  a  brief  hearing 
the  Appraiser  declared  the  case  closed  and  refused 
to  take  any  further  evidence.  The  Appraiser  there- 
upon made  his  report  and  filed  it  with  the  Clerk  of 
the  County  Court  on  April  10th,  1908.  Thereafter, 
on  April  24th,  the  County  Judge  entered  an  order 
approving  the  report  of  the  Appraiser  and  fixing  the 
cash  value  of  estates  given  to  the  beneficiaries  and 
taxes  on  the  same,  as  provided  by  Section  11  of  said 
Inheritance  Tax  Law.  (Kurd's  Stat.  1908,  p.  1822.) 
From  this  order  the  Attorney  Greneral  prayed  and 
was  allowed  an  appeal  to  the  County  Court  of  Edgar 
County.  This  appeal  was  perfected,  and  thereafter 
appellees  made  a  motion  in  the  County  Court  to  dis- 
miss the  appeal,  for  the  reason  that  the  State  had 
no  statutory  right  to  appeal  from  the  County  Judge 
to  the  County  Court  under  said  Inheritance  Tax 
Law.  This  motion  was  allowed  and  the  appeal  dis- 
missed, whereupon  the  Attorney  General  prayed  and 
was  allowed  an  appeal  to  this  Court. 

The  appellees  contended  that  the  County  Court 
improperly  made  an  order,  based  on  memoranda 
kept  on  the  docket  of  the  County  Judge,  to  file  nunc 
pro  tunc  the  Appraiser's  report.  The  question  can- 
not be  considered  by  us,  as  no  cross-errors  have  been 
assigned  by  the  appellees.  Kantzler  v.  Bensinger, 
214  111.  589;  Provart  v.  Harris,  150  Id.  40;  Expanded 
Metal  Fireproofing  Co,  v.  Boyce,  233  Id,  284. 

Appellees  further  contend  that  the  question  of 
the  right  of  the  State  to  appeal  from  the  order  of 
the  County  Judge  to  the  County  Court  does  not  di- 
rectly involve  revenue,  and  therefore  this  appeal 


179 

should  have  been  to  the  Appellate  Court  and  not  to 
the  Supreme  Court.  By  Sections  21^  and  llj,  which 
were  made  a  part  of  the  Inheritance  Tax  Law  by- 
amendment  in  1901,  it  is  plain  that  Inheritance  Tax 
cases  are  appealed  directly  to  the  Supreme  Court 
frona  the  County  Court,  regardless  of  whether  reve- 
nue is  directly  involved.  The  universal  practice,  as 
well  before  as  since  these  amendments  were  passed, 
has  been  to  appeal  such  matters  directly  from  the 
County  Court  to  the  Supreme  Court.  Kochersper- 
ger  v.  Drake,  167  111.  122 ;  Ayers  v.  Chicago  Title  <& 
Trust  Co.,  187  id.  42;  Billings  v.  People,  189  id.  472; 
Walker  v.  People,  192  id.  106;  Provident  Hospital  S 
Training  School  v.  People,  198  id.  495;  People  v. 
McCormick,  208  id.  437 ;  People  v.  Moir  estate,  207 
id.  180;  Connell  v.  Croshy,  210  id.  380;  Rosenthal  v. 
People,  211  id.  306 ;  Merrifield  Estate  v.  People,  212 
id.  400;  In  re  Estate  of  Speed,  216  id.  23;  People  v. 
Kelley,  218  id.  509 ;  In  re  Estate  of  Kingman,  220  id, 
563 ;  In  re  Estate  of  Benton,  234  id.  366. 

The  further  and  chief  contention  is,  that  the  State 
has  no  right  of  appeal  from  the  order  of  the  County 
Judge  to  the  County  Court.  Said  Section  11  of  the 
Inheritance  Tax  Law,  after  providing  for  the  ap- 
pointment of  the  Appraiser  and  as  to  the  method  of 
finding  and  reporting  the  value  of  the  estate,  con- 
tinues: ^From  this  report  the  said  County  Judge 
shall  forthwith  assess  and  fix  the  then  cash  value 
of  all  estates,  annuities  and  life  estates  or  terms  of 
years  growing  out  of  said  estate,  and  the  tax  to 
which  the  same  is  liable  and  shall  immediately  give 
notice  by  mail  to  all  parties  known  to  be  interested 
therein.  Any  person  or  persons  dissatisfied  with 
the  appraisement  or  assessment  may  appeal  there- 
from to  the  County  Court  of  the  proper  County 
within  sixty  days  after  the  making  and  filing  of  such 
appraisement  or  assessment  on  paying  or  giving 
security  satisfactory  to  the  County  Judge  to  pay 
all  costs,  together  with  whatever  taxes  shall  be  fixed 
by  said  Court.*  This  seems  to  have  been  the  only 
provision  touching  appeals  in  the  law  as  it  stood 
when  first  enacted  in  1895. 

The  further  contention  is  made  that  the  statute 


180 

did  not  intend  to  give  the  State  the  right  of  appeal 
from  the  action  of  the  County  Judge,  because  said 
Section  11  provides  that  such  appeals  shall  be  al- 
lowed *on  paying  or  giving  security  satisfactory  to 
the  County  Judge,  etc.,'  and  that  the  State  is  not 
required,  in  appealing,  to  give  bond.  We  do  not 
think  the  conclusion  contended  for  follows.  Sec- 
tion 192  of  the  Revenue  Law  (Kurd's  Stat.  1908,  p. 
1782)  which  provides  for  appeals  from  the  judgment 
of  the  County  Court  in  tax  matters,  provides  that 
Hhe  party  praying  an  appeaP  shall  execute  a  bond 
to  The  People  of  the  State  of  Illinois,  with  two  or 
more  sureties,  to  be  approved  by  the  Court.'  The 
practice  in  this  State  since  the  enactment  of  this 
Section  has  been  uniform  to  permit  an  appeal  by 
the  State  and  without  requiring  a  bond.  By  a  fair 
construction  of  Section  11,  taken  in  connection  with 
the  entire  Inheritance  Tax  Law,  it  manifestly  was 
intended  to  give  to  the  People  the  right  to  appeal 
from  the  order  of  the  County  Judge  appraising  or 
assessing  the  tax,  to  the  County  Court.  This  is  in 
accord  with  the  practice  and  settled  rules  of  law. 
Any  other  conclusion  would  be  unnatural  and  un- 
reasonable and  tend  to  defeat  justice. 

The  further  contention  of  appellees  that  the  order, 
of  appeal  in  question  was  from  the  finding  of  the 
County  Judge  approving  the  Appraiser's  report, 
when  it  should  have  been  from  the  finding  of  the 
County  Judge  assessing  and  fixing  the  cash  value  of 
the  estate,  cannot  be  upheld.  The  County  Judge, 
by  the  same  order,  approved  both  the  Appraiser's 
report  and  fixed  the  cash  value  and  the  appeal  was 
plainly  from  the  entire  order."  People  v.  Sholem, 
238  111.  203. 

276.     County    Judge   Must    Appoint   Appraisexv- 
Mandamus  May  be  Invoked. 

In  an  appeal  from  an  order  of  the  special  term,  deny- 
ing application  for  a  peremptory  writ  of  mandamus,  re- 
quiring the  surrogate  of  Kings  County,  (N.  Y.)  to  ap- 
point an  Appraiser  in  a  transfer  tax  proceeding  on  mo- 


181 

tion  of  the  comptroller,  under  Laws  of  1896,  ch.  908,  Sec. 

230,  as  amd.  by  Laws  1904,  ch.  758,  which  provides : 

**The  surrogate  either  upon  his  own  motion  or 
upon  the  application  of  any  interested  party,  includ- 
ing the  comptroller  of  the  State  of  New  York,  shall, 
by  order,  direct  the  County  Treasurer,  in  the  county 
in  which  the  office  of  the  Appraiser  is  not  salaried, 
and  in  any  other  county  the  person  or  one  of  such 
persons  so  designated  as  Appraisers,  to  fix  the  fair 
market  value  of  property  of  persons  whose  estates 
shall  be  subject  to  the  payment  of  any  tax  imposed 
by  this  article."    (Tax  Law  Article  10  as  amended.) 

The  Court  held: 

^*At  the  threshold  of  this  inquiry  it  is  important 
to  determine  whether  this  provision  is  mandatory. 
It  is  well  settled  that  where  a  statute  clothes  a 
public  officer  with  power  to  do  an  act  which  con- 
cerns the  public  interests,  the  execution  of  the  power 
may  be  insisted  upon  as  a  duty  even  though  the 
language  of  the  statute  be  permissive  only.  The 
language  of  the  statute  under  consideration  is  im- 
perative. The  portion  of  the  statute  quoted  supra 
was  taken  from  Section  11  of  Chapter  399  of  the 
Laws  of  1892,  but  with  a  significant  omission.  As 
the  statute  originally  was  it  provided :  *  The  surro- 
gate, upon  the  application  of  any  interested  party 

*  *  *  shall,  as  often  and  whenever  occasion  may 
require,  appoint  a  competent  person  as  Appraiser, 

*  *  *.'  The  Court  of  Appeals  said,  in  Matter  of 
Westurn,  (152  N.  Y.  93),  that  this  statute  left  it  to 
the  sound  discretion  of  the  surrogate  to  determine 
when  the  power  should  be  exercised;  and  the  pres- 
ent case  furnishes  a  concrete  illustration  of  the  rea- 
son, founded  upon  experience,  that  doubtless  moved 
the  Legislature  to  eliminate  the  words  affording 
ground  for  this  construction.  This  statute  provides 
the  machinery  for  the  assessment  and  collection  of 
the  tax,  and  makes  the  surrogate  of  each  county  a* 
part  of  it.  He  is  required  in  the  first  instance  to 
appoint  an  Appraiser  (Tax  Law,  paragraph  230,  as 
amd.  supra) ;  upon  the  report  of  the  Appraiser  and 


182 

any  other  proof  relating  to  the  estate  which  may 
be  before  him,  he  is  required  forthwith  as  of  course 
to  determine  the  cash  value  of  the  estate  and  the 
amount  of  tax  to  which  it  is  liable.  (See  Tax  Law, 
Par.  232,  as  amd.  by  Laws  of  1901,  Chap.  173.)  It 
is  plain  that  up  to  this  point  he  acts  as  an  assessing 
officer  merely,  of  course,  judicially  the  same  as  every 
assessor  acts.  From  the  initial  order  imposing  the 
tax  an  appeal  lies  in  the  first  instance  to  the  sur- 
rogate, who  thereupon  is  required  to  review  his  own 
acts  as  such  assessing  officer.  (See  Tax  Law,  Par. 
232,  as  amd.  supra.)  The  initial  step  in  the  pro- 
ceeding in  the  appointment  of  an  Appraiser,  and 
the  surrogate  is  required  to  make  such  appointment 
either  on  his  own  motion,  or  upon  the  application  of 
any  interested  party,  including  the  State  Comptrol- 
ler ;  he  must  act  upon  his  own  motion  when  he  learns 
of  the  facts  affording  reason  to  believe  that  such 
proceeding  ought  to  be  instituted,  upon  the  applica- 
tion of  an  interested  party  when  a  proper  applica- 
tion is  made.  The  reason  for  making  the  surrogate 
the  assessing  officer  and  requiring  him  to  act  upon 
his  own  motion  is  plain;  no  other  officer  in  the  State 
has  the  same  opportunity  to  learn  when  a  transfer 
tax  ought  to  be  imposed,  as  all  resident  estates  and 
nonresident  estates  in  which  it  is  necessary  to  apply 
for  ancillary  letters  become  of  record  in  his  office; 
and  although  it  was  said  in  Matter  of  O^Donohue  (44 
App.  Div.  (N.  Y.)  186)  that  Hhe  jurisdiction  of  the 
surrogate  to  appoint  an  Appraiser  is  one  that  may 
be  exercised  with  or  without  a  petition  and  of  his 
own  motion,  whenever  in  the  sound  exercise  of  his 
discretion  he  deems  it  proper  to  do  so'  (the  ^exer- 
cise of  his  discretion'  evidently  referring  to  action 
upon  his  own  motion),  I  think  the  duty  to  act  in 
either  case  is  imperative.  Of  course,  before  acting 
on  his  own  motion,  he  must  determine  whether  the 
facts  within  his  official  knowledge  are  such  as  to  re- 
quire action,  and  before  acting  upon  the  application 
of  an  interested  parity  he  must  determine  whether 
a  proper  application  has  been  made,  but  his  duty 
to  act  is  just  as  imperative  in  either  case  as  is  the 
duty  of  local  assessors  to  obey  the  command  of  the 


183 

statute  respecting  the  performance  of  their  duty, 
and  there  is  no  more  reason  for  saying  that  he  has 
a  discretion  in  the  matter  than  there  is  for  saying 
that  any  officer  charged  with  the  performance  of  a 
public  duty  has  a  discretion  whether  he  will  dis- 
charge such  duty. 

Was  a  proper  application  made?  The  application 
was  made  upon  a  verified  petition  which  set  forth 
facts  upon  which  the  jurisdiction  of  the  surrogate  to 
act  depended.  To  be  sure  the  allegations  are  upon 
information  and  belief,  but  this  is  good  pleading  and 
is  expressly  authorized  by  the  Code  of  Civil  Proced- 
ure, whether  in  an  action  or  in  a  proceeding  in  Sur- 
rogate's Court,  and  surely  more  cannot  be  required 
respecting  the  petition  for  the  institution  of  this 
proceeding  than  is  required  to  institute  proceedings 
in  the  Surrogate's  Court.  The  petition  is  made  by 
the  officer  charged  by  law  with  the  duty  of  collecting 
the  tax;  he  cannot  know  of  his  own  knowledge  as 
to  the  taxability  of  these  estates,  and  the  very  pur- 
pose of  these  proceedings,  as  the  law  plainly  con- 
templates, is  to  ascertain  the  fact.  From  the  affi- 
davit of  the  learned  surrogate  submitted  upon  this 
motion,  it  appears  that  he  is  of  opinion  that  oppress- 
ion to  estates  may  result,  unless  the  State  Comp- 
troller is  required  to  establish,  in  advance,  the  facts 
to  ascertain  which  the  proceeding  is  required  to  be 
instituted.  The  fact  that  some  other  officer  may 
not  understand  his  duty  furnishes  no  reason  for  dis- 
regarding the  statute.  But  the  proceeding  need  in- 
volve no  expense  to  the  estate.  The  Appraiser 
merely  ascertains  the  facts  and  reports  them  with 
the  evidence  to  the  surrogate,  and  the  statute  guards 
against  the  unlawful  imposition  of  a  tax,  and  gives 
the  estate  full  and  complete  protection.  Those  who 
desire  to  evade  paying  what  the  law  imposes  in  re- 
turn for  the  protection  of  their  persons  and  prop- 
erty afforded  by  the  State  may  call  the  oppression. 
The  danger  is  not  the  one  feared  by  the  learned 
surrogate,  but  that  estates  legally  taxable  will  escape 
taxation;  respecting  resident  estates,  that,  owing  to 
delay,  the  estate  may  be  wasted  or  distributed  with- 
out application  to  the  surrogate,  or  that  it  may  be- 


184 

come  difficult  to  ascertain  the  facts  and  enforce  pay- 
ment of  the  tax ;  respecting  nonresident  estates,  that 
property  subject  to  tax  may  be  removed  from  the 
State  without  the  payment  of  the  tax,  except  as  the 
transfer  of  securities  of  decedents  without  the  pay- 
ment of  the  tax  may  be  prevented  by  another  provis- 
ion of  the  statute/' 

The  question  was  raised  in  this  proceeding  whether 
mandamus  was  the  proper  remedy.  The  Court  held, 
that  mandamus  was  the  proper  remedy.  Kelsey  v.  Church, 
112  App.  Div.  (N.  Y.)  408. 

277.  County  Judge— Has  Original  Jurisdiction  to 

Fix  the  Tax. 

*^  Section  11  of  the  original  act  provides  the 
County  Judge  shall  appoint  a  competent  person  an 
Appraiser  who  shall  make  report  of  the  value  of  the 
property  to  the  County  Judge,  from  which  report, 
he  (the  County  Judge),  shall  fix  the  cash  value  of 
all  estates,  and  shall  give  notice  by  mail  to  all  par- 
ties interested.''  Provident  Hospital  v.  People,  198 
111.  495. 

278.  County  Judge  is  Assessing  and  Taxing  Of- 

ficer. 

Section  13,  ch.  483,  of  the  Collateral  Inheritance  Tax 
Law  of  1885  (N.  Y.)  designates  the  surrogate  to  act  as 
an  assessing  or  taxing  officer.  In  such  capacity  he  acts 
as  the  State's  representative.  Matter  of  Wolfe,  137  N.  Y. 
205. 

279.  County  Judge-^Is   Made   a  Taxing  Officer — 

Fixes  Tax   '*as   of  Course".      Is  a   Special 
System  of  Taxation. 

In  reviewing  the  Section  of  the  New  York  T'ransfer  Tax 
Law  of  1892  providing  for  the  appointment  of  an  Ap- 
praiser and  the  assessment  of  the  tax,  the  Court  held: 


185 

The  statute  constitutes  the  surrogate,  and  him  alone,  the 
assessing  and  taxing  officer.  After  the  Appraiser  has 
appraised  the  property  the  surrogate  enters  his  order 
fixing  the  tax  ^  ^  as  of  course,  ^ '  and  thereafter  any  person 
aggrieved  may  appeal  therefrom.  By  both  the  initial 
Act  of  1885  and  the  subsequent  one  of  1892,  a  special 
state  tax  not  belonging  to  the  system  of  general  taxa- 
tion, was  created.  Weston  v.  Goodrich,  93  Sup.  Ct.  Rep. 
(N.  Y.)  194. 

280.  County  Judge— Order  of  Tax  Must  be  En- 
tered "Forthwith".  Objection  to  Order 
Cannot  Then  be  Made. 

The  Appellate  Division  (N.  Y.)  in  construing  Section 
8,  ch.  173,  L.  1901,  of  New  York,  which  relates  to  the  ap- 
pointment of  an  Appraiser  and  the  report  of  said  Ap- 
praiser to  the  County  Judge  and  the  entry  of  the  tax 
order,  said: 

'^By  the  provisions  of  Section  8,  ch.  173,  it  is 
provided  ^that  the  report  of  an  Appraiser  shall  be 
made  in  duplicate,  one  of  which  duplicates  shall  be 
filed  in  the  office  of  the  surrogate  and  the  other  in 
the  office  of  the  State  Comptroller.'  From  such  re- 
port and  other  proof  relating  to  any  such  estate  be- 
fore the  surrogate,  the  surrogate  shall  forthwith  as, 
of  course,  determine  the  cash  value  of  all  estates 
and  the  amount  of  tax  to  which  the  same  are  liable.'' 

The  only  fair  understanding  of  Section  8,  Ch.  173,  L. 
1901,  is  that  the  surrogate  shall  proceed  without  the  in- 
tervention of  anyone  when  he  has  such  report  before 
him.  Matter  of  Fuller,  62  App.  Div.  (N.  Y.)  428.  Dixon 
V.  Russell,  73  Atl.  51. 

281.  County  Court—Has  Power  to  Determine  All 
Questions   Relating  to   Taxation. 

The    Collateral   Inheritance    Tax   Law    of   1885,    as 


186 

amended  in  1887  gives  the  Surrogate  Court  plenary  pow- 
er to  determine  all  questions  bearing  upon  taxation,  and 
may  construe  a  will  for  that  purpose,  or  pass  upon  the 
testacy  or  intestacy  of  decedent.  Matter  of  Ullman,  137 
N.  Y.  403;  Re  Peters  Estate,  74  N.  Y.  S.  1028. 

282.     County   Court— Construction   of    Will   Con- 
clusive  Only  as  to  Taxation. 

The  judgment  of  a  surrogate  under  the  Collateral  In- 
heritance Tax  Act  (N.  Y.)  interpreting  the  will  or  de- 
ciding the  testacy  of  a  decedent  adjudicates  the  question 
of  taxation  only.    Amherst  College  v.  Ritch,  151  N.  Y. 

282.  Matter  of  Ullman,  137  N.  Y.  403.  Re  Peter's,  74 
ISr.  Y.  S.  1028. 

283.  When  State  not  Bound  by  Construction  of 

Will. 

^'An  executor  who  takes  one- third  of  residuary  estate 
ahsolutely  unencumbered  by  any  trust,  imposed  by  the 
will  itself,  is  not  relieved  from  the  tax  imposed  by  Law  of 
1887  (N.  Y.)  by  a  judicial  construction  based  on  extrinsic 
evidence,  that  said  executor  took  the  bequest  charged 
with  a  trust  in  favor  of  testatrix's  brother.''  McElroy 
on  the  Transfer  Tax  Law  (N.  Y.)  2nd  Ed.  58-59,  citing, 
Matter  of  Edson,  38  App.  Div.  (N.  Y.)  19,  aff'd  159 
(N.  Y.)  568. 

284.  County  Judge  Has  Original  Jurisdiction  to 

Determine  Tax. 

In  a  suit  to  construe  a  certain  provision  of  the  will  of 
decedent  instituted  in  the  Supreme  Court  of  the  State 
of  New  York,  the  trustee  also  requested  the  Court  to 
ascertain  whether  the  property  limited  by  the  provision 
of  the  will  in  question  was  subject  to  the  Collateral  In- 
heritance Tax.  The  Court  held,  that  the  Supreme  Court 
was  without  jurisdiction  to  determine  originally  whether 


187 

a  tax  was  due.  That  taxation  is  a  subject  outside  of  the 
jurisdiction  of  courts  of  equity.  That  the  surrogate  and 
the  Surrogate  Court  was  invested  by  the  Collateral  In- 
heritance Tax  Act  with  the  power  to  determine  questions 
of  taxation  thereunder.  Weston  v.  Goodrich,  93  Sup.  Ct. 
Eep.  (N.  Y.)  194,  86  Hun  194. 

285.  Appraiser. 

The  County  Judge  may  appoint  Appraiser  whenever 
occasion  may  require.  Matter  of  Lansing,  64  N.  Y.  S. 
1125. 

286.  Cominissioii  to  Take  Evidence. 

A  Surrogates'  Court  has  power  to  issue  a  commission 
to  take  the  testimony  of  foreign  witnesses  in  a  proceed- 
ing under  the  Transfer  Tax  Law.  Re  Wallace,  71  App. 
Div.  (N.  Y.)  284. 

287.  May  Compel  Witness  to  Testify. 

A  witness  who  refuses  to  respond  to  material  inter- 
rogatives  may  be  forced  to  answer  by  a  contempt  pro- 
ceeding; no  rights  are  lost  to  the  witness  to  have  taxes 
reduced  by  such  refusal.  Matter  of  Kennedy,  113  App. 
Div.  (N.  Y.)  4. 

288.  Not  Concluded    from  Taxing    Property  Es- 

caping   Taxation    because     of    Executor's 
Claim  it  ivas  not  Part  of  Estate. 

Property  which  has  escaped  taxation  in  the  first  ap- 
praisement, either  by  omission  through  inadvertence,  or 
because  it  was  not  scheduled  by  the  executor  on  the 
ground  it  was  not  a  part  of  the  estate,  may  be  the  sub- 
ject of  another  appraisement  and  the  surrogate  may  ap- 
point an  Appraiser  for  the  purpose  of  determining  the 


188 

taxation  thereof,  under  Laws  1892,  which  provide  that 
the  surrogate  shall  as  often  as,  or  whenever  occasion  may 
require,  appoint  a  competent  person  as  Appraiser.  Re 
Lansing's  Estate,  64  N.  Y.  SL  1125;  Re  Niven,  61  N.  Y. 
S.  956. 

289.  Order  of  Tax— Is  Final  as  to  Property  In- 

volved. 

*' Where  the  Appraiser  is  duly  appointed  and  notice 
of  appraisal  given  and  the  report  confirmed  after  due 
notice  to  the  City  Comptroller,  the  State  cannot  hold  the 
executor  personally  for  the  taxes  on  legacies  improperly 
found  exempt  by  the  Appraiser.  {Matter  of  Vanderhilt, 
10  N.  Y.  S.  239.) ''  Greene's  Law  of  Taxable  Transfers, 
2nd  Ed.  65. 

290.  Order  of  Tax  is  Final  When  not  Appealed 

From. 

Decedent  died  a  resident  of  New  York  in  December, 
1893,  limiting  a  fund  of  $30,000.00  in  trust  for  the  life 
of  his  step-daughter,  or,  until  she  was  married.  The 
residue  of  the  estate  was  limited  in  trust  for  the  bene- 
fit of  his  daughters.  The  Appraiser  found  that  the  value 
of  the  life  interest  of  the  respective  daughters,  as  well 
as  the  remainders  could  not  be  determined,  and  he  made 
a  similar  finding  as  to  the  $30,000.00  trust.  This  report 
was  approved  by  the  surrogate  July  16th,  1894.  On  No- 
vember li6th,  1898,  another  Appraiser  was  appointed  to 
determine  the  tax  on  the  estate  of  said  decedent  and  he 
made  a  report  that  ^  *  no  evidence  has  been  presented  show- 
ing deceased  left  any  property  within  the  State  of  New 
York  subject  to  the  transfer  tax.'*  It  did  not  appear 
that  any  order  was  made  confirming  this  report,  but  on 
December  27th,  1901,  another  Appraiser  was  appointed 
for  determining  the  tax  in  the  estate  of  said  decedent, 


189 

which  Appraiser  reported  April  22nd,  1903,  that  the  in- 
come paid  to  the  step-daughter  and  the  three  daughters 
of  decedent  from  the  date  of  testator's  death  to  the  time 
report  was  made,  were  subject  to  tax.  This  report  was 
confirmed  by  an  order  of  the  surrogate  insofar  as  it  im- 
posed a  tax  upon  the  interests  of  the  daughters  as  fixed. 
An  appeal  was  taken  from  this  last  order  on  the  ground 
that  the  first  order  entered  July  16th,  1894,  was  a  com- 
plete bar  to  further  proceedings.    The  Court  held: 

*'The  report  made  by  the  first  Appraiser  which 
was  confirmed  by  an  order  of  the  Surrogate's  Court, 
precludes  subsequent  action  to  determine  and  fix  the 
transfer  tax  until  the  happening  of  one  or  the  other 
of  the  events  specified  which  terminates  such  trust 
estates.  The  situation  now  is  precisely  what  it  was 
when  that  order  was  made,  except  the  amount  of  in- 
come paid,  and  the  right  to  assess  the  transfer  tax 
manifestly  does  not  depend  upon  this.  {Matter  of 
Shane,  154  N.  Y.  109.)  That  order  is  in  effect,  a 
final  determination  of  the  subject  and  is  effectually 
binding,  there  being  no  change  in  the  estate,  upon 
the  Comptroller  and  the  executor  so  long  as  it  re- 
mains in  force.  This  order  was  not  appealed  from. 
It  is  the  law  applicable  to  the  question  presented 
and  the  Comptroller  can  no  more  avoid  its  effect 
than  can  the  executor  and  trustee  named  in  the  will. 
It  is  binding  upon  both  equally  and  cannot  be 
avoided  by  instituting  a  new  proceeding  and  thereby 
getting  another  referee  to  make  a  different  report. 
If  this  could  be  done,  it  is  not  difficult  to  see  that 
a  trustee  under  a  will  similar  to  this  one  might  be 
subjected  to  a  large  personal  liability.  (Laws  1892, 
ch.  399,  par.  3,  4)  even  though  he  strictly  obeyed 
the  order  of  the  Surrogate's  Court."  Matter  of 
Lawrence,  96  App.  Div.  (N.  Y.)  29. 

291.  Order  of  Tax  Cannot  be  Modified  Except  by 
Appeal— Excessive  Valuation  not  Revieiv- 
able  on  Petition. 

The  surrogate  acting  as  assessor  fixed  the  value  of 


190 

property  in  an  appraisement  proceeding  by  the  approval 
of  an  Appraiser's  report,  at  the  sum  of  $290,000.00.  No 
appeal  was  taken  from  this  order.  Subsequently  a  motion 
was  allowed  by  the  surrogate  vacating  the  order  of  tax 
on  the  ground  that  the  value  as  fixed  was  excessive  and 
that  the  real  value  of  the  property  was  $139,700.00.  The 
Court  held :  The  first  determination  of  the  surrogate  re- 
sulted fairly  in  a  judicial  determination  in  fixing  the 
value  of  the  property.  Such  determination  may  be  treated 
no  more  lightly  than  the  solemn  determination  of  courts 
of  record  and  should  not  be  set  aside  except  under  cir- 
cumstances similar  to  those  held  sufficient  to  warrant 
granting  a  new  trial  in  courts  of  record.  {Matter  of 
Lcmry,  89  App.  Div.  (N.  Y.)  226;  Matter  of  Barnim, 
129  App.  Div.  (N.  Y.)  418. 

292.  Order  of  Tax  is  Final. 

A  surrogate  entered  an  order  fixing  tax  which  wa;s  not 
appealed  from.  Subsequently  he  set  aside  said  order 
on  a  motion  that  certain  securities  were  erroneously  as- 
sessed. The  court  held:  ^*We  fail  to  find  our  attention 
has  not  been  called  to  any  authority  conferred  upon  the 
surrogate  to  make  such  an  order  as  the  one  appealed 
from.  There  are  provisions  for  reviewing  the  deter- 
mination of  the  surrogate  by  appeal  and  there  are  pro- 
visions authorizing  him  under  certain  circumstances  to 
modify  and  set  aside  adjudications.  Matter  of  Scher- 
merhorn,  38  App.  Div.  (N.  Y.)  350;  Matter  of  Crerar,  56 
App.  Div.  (N.  Y.)  479. 

293.  Order  of  Tax  is  Final  and  Reappraisement 

Cannot  be  Made. 

Some  time  subsequent  to  the  date  of  an  order  of  tax 
which  fixed  the  value  of  real  estate  and  the  tax  thereon, 


191 

such  real  estate  was  sold  at  public  auction  and  the  prices 
realized  were  greatly  in  excess  of  the  values  fixed  in  the 
appraisal.  The  comptroller  moved  for  a  reappraise- 
ment.  The  Court  held:  In  substance  that  the  Comp- 
troller's evidence  should  have  been  adduced  at  the  ap- 
praisement, and  that  the  order  could  not  be  opened  on 
motion.    Matter  of  Bruce,  59  K  Y.  S.  1083. 

294.     Order  of  Tax  is  Final  and  Can  Only  be  Re- 
vie-wed  by  Appeal. 

In  an  appraisement  of  the  estate  of  Joseph  L.  Lowry, 
the  decedent's  real  estate  was  valued  by  the  Appraiser 
at  $200,000.00.  This  estimate  was  made  by  Cornelius 
Fergueson,  one  of  the  trustees  under  decedent's  wiU. 
The  Appraiser's  report  was  approved  by  the  surrogate 
on  December  30th,  1902.  In  April  of  the  following  year 
the  decedent's  real  estate  was  sold  fairly  and  in  good 
faith  at  public  auction  for  $103,050.00.  Acting  evidently 
upon  the  assumption  that  this  sale  was  better  proof  of 
the  actual  value  of  the  lands  than  the  expert  evidence  of 
the  trustees  upon  which  the  Appraiser's  report  was 
based,  and  expressly  holding  that  a  mistake  of  fact  had 
been  made  in  fixing  the  value  of  the  real  estate  at 
$200,000.00,  the  surrogate  modified  the  original  order  of 
tax  and  report  of  the  Appraiser  by  reducing  the  valua- 
tion to  the  sum  of  $103,050.00.  The  Comptroller  ob- 
jected.   The  Court  held: 

*^  Under  the  Transfer  Tax  Law  the  Stirrogate's 
Court  may  do  any  act  in  relation  to  such  a  tax  au- 
thorized by  law  to  be  done  by  a  surrogate  in  other 
matters  or  proceedings  coming  within  his  jurisdic- 
tion (L.  1896,  ch.  908,  Sec.  229) ;  and  in  such  matters 
or  proceedings  he  may  open,  vacate,  modify  or  set 
aside,  or  enter  as  of  a  former  time  a  decree  of  his 
Court;  or  may  grant  a  new  trial  or  hearing  for 


192 

fraud,  newly  discovered  evidence,  clerical  error  or 
other  sufficient  cause. 

Inasmuch  as  the  learned  surrogate  has  expressly 
based  the  original  modification  of  his  decree  upon  a 
mistaken  fact  in  the  appraisal  which  he  approved, 
the  principal  question  to  be  considered  upon  the 
present  appeal  is  whether  the  errors  of  fact  for 
which  a  court  of  original  jurisdiction  has  power  to 
vacate  or  modify  its  judgments,  include  the  deter- 
mination of  a  question  of  value  on  the  trial  or  hear- 
ing; which  determination,  although  made  on  com- 
petent evidence,  appears  to  have  been  erroneous  in 
the  light  of  events  which  have  occurred  since  it  was 
made ;  I  do  not  mean  matters  then  existing  and  sub- 
sequently discovered  but  occurrences  which  have 
happened  wholly  subsequent  to  the  trial  or  hearing 
*  *  *.  Of  course,  if  a  transfer  decree  can  be  modi- 
fied by  securing  the  valuation  placed  upon  the  real 
property  of  a  decedent  by  the  surrogate  because  it 
subsequently  sells  for  less  than  its  estimate,  it  may 
be  modified  by  increasing  such  valuation  in  a  case 
where  the  property  subsequently  sells  for  more.  It 
seems  to  me  that  an  error  of  this  character  *  *  * 
must  be  determined  to  be  an  error  arising  upon  a 
trial  and  hence,  to  be  not  within  the  purview  of  Sec- 
tion 1283,  Code  Civ.  Proc.  as  made  applicable  to  the 
surrogate 's  court  by  Section  2481.  *  *  *  A  prac- 
tice which  would  permit  judgments  fixing  values  to 
be  open  from  time  to  time  in  cases  where  a  subse- 
quent sale  of  the  appraised  property  tended  to  show 
the  figure  fixed  by  the  judgment  was  too  large  or 
too  small  would  lead  to  intolerable  uncertainty  and 
confusion. '^  Matter  of  Lowry,  89  App.  Div.  (N.  Y.) 
226-228. 

295.     Cannot  Amend  Order  Assessing  Tax. 

The  surrogate  is  without  power  to  amend  or  open  a 
tax  order,  either  on  error  of  law  or  fact,  without  appeal. 
Matter  of  Coogan  is  distinguished  on  the  reasoning  that 
the  U.  S.  bonds  were  without  the  jurisdiction,  and  the 
order  of  tax  therein  void.  Matter  of  Wallace,  28  Misc. 
Eep.  (N.  Y.)  603. 


193 

296.  Can  Amend  or  Correct  Order  xrithout  Ap- 

peal. 

Where  there  was  no  jurisdiction  to  assess  U.  S.  bonds 
in  an  appraisement  under  L.  1892,  (N.  Y.),  the  surrogate 
has  power  under  L.  1896  to  modify  order  without  appeal 
and  direct  a  refund,  although  the  time  of  appeal  has  ex- 
pired. Matter  of  Coogan,  27  Misc.  Rep.  (N.  Y.)  563,  aff 'd 
45  App.  Div.  (N.  Y.)  628;  162  N.  Y.  613. 

297.  Cannot  Reverse  Order  of  Tax  on  Motion. 

Surrogate  cannot  without  appeal,  decree  prior  order 
erroneous  on  the  ground  payment  was  made  in  error. 
Matter  of  Schermerhorn,  57  N.  Y.  S.  26. 

298.  Order  of  Tax  is  a  Decree  or  Order  of  Court. 

It  was  contended  that  the  order  of  tax  was  not  an  order 

or  decree  in  the  ordinary  sense  of  that  term.    In  passing 

upon  this  question,  the  Court  said: 

^*It  is  conceded  that  the  specific  act  under  which 
the  tax  was  imposed  has  been  declared  by  the  Court 
of  Appeals  to  be  unconstitutional,  and  it  must  follow 
that  the  decree  of  the  Surrogate's  Court  assessing 
and  fixing  the  tax  was  void.  The  appellant  urges 
that  although  a  void  order  or  judgment  of  a  court 
may  be  vacated  by  that  Court  without  restricting  the 
aggrieved  party  to  his  remedy  by  appeal,  still  in 
this  case  the  surrogate  is  in  fact  not  a  surrogate  at 
all  when  he  is  fixing  a  transfer  tax,  but  rather  a  tax- 
ing officer  acting  ministerially,  and  devoid  of  power 
except  that  conferred  upon  him  by  the  Tax  Law,  and 
that  the  surrogate  as  such,  has  no  power  to  vacate  a 
decree  made  by  the  surrogate  as  taxing  officer.  As- 
suming that  when  he  is  fixing  a  tax  and  making  the 
decree  assessing  it  he  is  not  acting  as  a  surrogate, 
as  the  appellant  contends,  yet  the  decree  upon  the 
taxation  becomes  a  decree  or  order  of  his  court,  and 
we  think  that  the  language  of  the  6th  division  of  Sec- 
tion 2481  of  the  Code  of  Civil  Procedure,  together 


194 

with  that  Section  of  229  of  the  Tax  Law  (Laws  1896, 
ch.  908  as  amd.  by  L.  1901,  ch.  173),  is  broad  enough 
to  confer  upon  him  complete  jurisdiction  to  vacate 
void  order  of  his  court.  This  exact  question  was 
the  subject  of  consideration  in  Matter  of  Coogan, 
(27  Misc.  Rep.  (N.  Y.)  563;  aff'd  sub.  nom.  Matter 
of  Coogan  v.  Morgan,  162  N.  Y.  613),  and  we  believe 
the  conclusions  reached  there  should  be  approved. '' 
Matter  of  Scrimgeour,  80  App.  Div.  (N.  Y.)  389. 


299.     Surrogate  Acts  Judicially  in  Entering;  Order 
of  Tax. 

*  ^  It  is  perfectly  true,  of  course,  that  the  power  of 
taxation  is  one  which  belongs  to  the  legislative  de- 
partment, and  it  is  equally  true  that  some  of  the 
functions  of  a  taxing  officer  are  ministerial,  but  it  is 
well  established  by  authority  that  in  determining 
the  value  of  the  property  assessed,  the  extent  of 
claims  to  exemption,  etc.,  the  taxing  officer  or  board 
acts  judicially.  {McLean  v.  Jephson,  123  N.  Y.  142, 
149,  and  authority  there  cited ;  Stanley  v.  Supervis- 
ors of  Albany,  121  U.  S.  535,  550;  City  of  New  York 
V.  McLean,  170  N.  Y.  374,  383,  and  authorities  there 
cited).  To  the  extent  that  the  surrogate  acts  judi- 
cially in  determining  the  amount  of  tax  to  be  im- 
posed upon  the  privilege  of  receiving  transfers  of 
property  there  can  be  no  doubt  that  there  is  a  right 
of  appeal,  according  to  the  theory  of  the  learned 
counsel  for  the  relator,  and  it  must  be  presumed, 
upon  this  motion,  that  the  appeal  relates  to  the  judi- 
cial acts  of  the  surrogate. ' '  Matter  of  Hull,  109  App. 
Div.  (N.  Y.)  248. 


300.     Notice  of  Tax: — Presumption    of    Service  by 
County  Judge. 

It  will  be  presumed  that  notice  of  the  assessment  was 
given  as  provided  by  law.  Matter  of  Miller,  110  N.  Y. 
216. 


195 


301.  County  Judge — Must  £nter  Order  According 

to  Direction  of  Court  of  Review — Appeal 
Cannot  be  Taken  in  Piecemeal. 

**Aii  appeal  cannot  be  taken  from  a  judgment  or  order 
by  piece-meal,  i.  e.,  separate  appeals  cannot  be  taken 
from  different  parts  of  a  judgment  or  order.  There  is 
no  authority  for  two  concurrent  appeals  from  the  same 
judgment  by  the  same  party  on  the  same  question.'' 

The  surrogate  must  enter  the  decree  of  the  Court  of 
Eeview  according  to  the  mandate  thereof.  Matter  of 
Cook,  125  App.  Div.  (N.  Y.)  114;  194  N.  Y.  400. 

302.  Appraisement  and  Appraiser. 

An  appraiser  is  a  public  officer  (People  ex  rel,  Mc- 
Knight  v.  Glynn,  106  N.  Y.  S.  956),  and  is  appointed  by 
the  County  Judge  and  takes  an  oath  of  office  in  each  case 
in  which  he  acts.  His  appointment  is  usually  evidenced 
by  a  written  or  printed  order  in  each  case  in  which  he 
acts,  which  order  and  oath  are  filed  with  the  Clerk  of  the 
County  Court.  His  powers  and  duties  are  of  a  quasi- 
judicial  character.  (McElroy  on  Transfer  Tax  Law, 
2nd  Ed.  p.  399  and  400).  Notice  to  all  persons  who  have 
or  claim  an  interest  in  the  property  appraisable  must 
be  served  by  the  Appraiser,  and  a  time  and  place  fixed 
for  hearings.  The  Attorney  General  is  the  representa- 
tive of  The  People  and  is  an  ** interested  party,"  entitled 
to  notice  of  all  proceedings.  {Re  Sholem,  238  HI.  203; 
National  Safe  Deposit  Co,  v.  Stead,  250  111.  584). 

In  Cook  County,  Illinois,  a  notice  should  be  given  the 
Inheritance  Tax  Attorney  who  represents  the  Attorney 
General  in  Inheritance  Tax  matters  in  that  County.  The 
Appraiser  must  make  written  report  to  the  County  Judge 


196 

which  shall  show  his  conclusions  of  value.    This  report 
should  contain  all  evidence  taken,  including  exhibits. 

303.     Appraiser  Fees. 

Section  11  provides  that  the  Appraiser  shall  be  paid 
such  compensation  as  the  County  Judge  may  deem  just, 
not  to  exceed  ten  dollars  per  day  for  each  actual  day's 
service,  out  of  the  inheritance  collected  in  the  appraise- 
ment in  which  he  acted;  (Act  of  1909).  The  Act  of 
1895,  as  amended  in  1901,  provided  for  payment  of  Ap- 
praiser out  of  any  inheritance  tax  moneys  in  hands  of 
County  Treasurer.  If  no  tax  is  collected  in  an  appraise- 
ment under  the  Act  of  1909,  the  Appraiser  is  not  entitled 
to  fees. 


304.  Expenses  and  Disbursements. 

The  Appraiser  is  entitled  to  reimbursement  for  moneys 
necessarily  expended  for  witness  fees,  together  with  his 
travelling  expenses.  Stenographic  services  when  reason- 
ably valued  and  paid  by  him  are  allowed  as  disburse- 
ments in  Cook  County,  Illinois. 

305.  Ijegal  Counsel  for  Appraiser. 

The  appraiser  cannot  engage  legal  counsel  and  charge 
the  expense  to  his  services.  (See  Attorney  GeneraPs 
opinions,  post.) 

306.  Service  is  Had  by  Notice. 

Service  is  had  by  mailing  notice  to  interested  parties. 
Matter  of  Winters,  21  Misc.  Rep.  (N.  Y.)  552.  Re  Van- 
derhiWs,  10  N.  Y.  S.  239. 


197 

307.  Appraisement  Must  Proceed  Under  Section 

Eleven  of  the  Illinois  Law. 

The  Court  of  Appeals  has  referred  to  Section  13,  L. 
1885  (N.  Y.),  as  follows:  When  the  machinery  of  this 
system  is  set  in  motion  under  Section  13  of  the  Act, 
whether  upon  application  of  interested  parties,  or  upon 
his  own  motion,  the  surrogate,  by  force  of  its  provisions, 
is  at  once  invested  with  the  office  and  functions  of  as- 
sessor and  has  power  to  determine  the  question  of 
whether  the  property  of  decedent  which  passes  to  others 
is  subject  or  liable  to  taxation  by  the  State.  Matter  of 
TFoZ/e,  137  N.  Y.  205. 

308.  Inventory — State  Has  Right  to  Compel  Fil- 

ing. 

Sholem  died  a  resident  of  Illinois,  March  1st,  1907, 
leaving  a  will,  which  was  admitted  to  probate  in  the 
County  Court  of  Edgar  County.  Executors  qualified,  but 
refused  to  file  an  inventory.  On  August  12th,  1907,  the 
Attorney  General  filed  a  petition  for  an  appraiser,  who 
was  accordingly  appointed,  and  fijxed  the  value  of  the 
estate  without  an  inventory  having  been  approved  by  the 
County  Court. 

The  Attorney  General  prosecuted  an  appeal  to  the 
County  Court,  which  appeal  was  dismissed  on  motion  of 
the  executors,  on  the  ground  that  the  Attorney  General 
was  not  invested  with  the  right  of  appeal,  which  order 
of  the  County  Court  was  reversed.  {People  v.  Sholem, 
238  111.  233.)  The  proceeding  was  then  reinstated  in  the 
County  Court.  The  Attorney  General  thereupon  peti- 
tioned the  Court  for  an  order  on  the  executors  to  file  an 
inventory,  the  prayer  of  which  petition  was  denied  and 
an  appeal  prosecuted  to  the  Supreme  Court.  It  was 
argued  by  the  executors  that  the  People's  representative 


198 

had  no  right  to  urge  that  the  statutes  be  complied  with 
so  far  as  filing  inventories  were  concerned.    The  Court 

held: 

**It  would  be  strange  doctrine  to  say  that  the 
People  of  the  State,  who  are  directly  inter- 
ested in  the  amount  of  an  estate  and  entitled 
to  know  its  extent  and  value  for  the  pur- 
poses of  an  inheritance  tax,  have  no  right  to 
call  upon  a  court  to  enforce  their  laws.  If  the  inven- 
tories had  been  filed  as  required  by  law,  the  repre- 
sentatives of  the  People  might  have  been  satisfied 
with  the  amount  represented  thereby  as  the  taxable 
value,  but  in  the  absence  of  the  inventories  it  was 
necessary  to  endeavor  to  ascertain,  by  means  of  wit- 
nesses, what  property  the  estate  had. 

It  is  said,  however,  by  counsel  for  the  appellees, 
that  the  judgment  ought  not  to  be  reversed  if  the 
ruling  was  wrong,  for  the  reason  that  the  People 
obtained  all  necessary  information  through  the  ex- 
amination of  witnesses.  It  may  be  that  all  the  prop- 
erty of  the  estate  was  discovered  and  it  may  be  that 
it  was  not,  and  in  any  event  the  People  were  re- 
quired to  take  up  an  unnecessary  burden.  We  can 
not  say  that  the  property  was  all  disclosed,  and  much 
complaint  is  made  that  the  court  excluded  competent 
evidence  tending  to  show  the  amount  of  the  estate. 
An  effort  was  made  to  discover  assets  in  the  form 
of  loans  and  mortgages  on  real  estate  in  Edgar 
County,  and  the  offered  evidence  was  excluded  by 
the  court.  Whether  the  rulings  were  right  or  wrong, 
it  cannot  be  said  that  it  made  no  difference  that  the 
court  did  not  require  the  executors  to  make  an  in- 
ventory of  all  the  property  which  had  come  to  their 
hands,  possession  or  knowledge,  or  that  an  inven- 
tory, under  oath,  by  the  surviving  partners  would 
have  been  of  no  use  to  the  People."  People  v. 
Sholem,  244  HI.  502. 

309.     Appraisement — Value  Fixed  at  Wliat  Time. 

All  property  should  be  appraised  and  the  tax  fixed  on 
the  succession  thereto  as  of  the  date  of  death  of  deced- 


199 

ent.    Re  Graves,  242  111.  212 ;  Matter  of  Vassar,  127  N. 
Y.  1. 

310.  Practice  and  Procedure — Wliicli    Law  Gov- 

erns. 

Procedure  and  rate  of  tax  may  be  governed  by  differ- 
ent Laws — Procedure  by  the  Law  in  force  when  the  ap- 
praisement is  initiated — The  tax  by  the  Law  in  force  at 
the  death  effecting  the  transfer.  Matter  of  Davis,  149 
K  Y.  539;  Re  Sloane,  154  N.  Y.  109. 

311.  Contingent  Estates — All  Property  Appraise- 

able — Tax  Postponed. 

All  property,  whether  vested  or  contingent,  should  be 
appraised,  but  the  tax  upon  a  contingent  estate  mus,t  be 
postponed  until  the  remainders  are  capable  of  valuation 
and  the  takers  become  indefeasibly  vested  in  the  prop- 
erty passing.    (L.  1895.)    Billings  v.  People,  189  111.  472. 

312.  Residence— Appraiser  May  Determine. 

*^ Section  231,  L.  1896  (N.  Y.),  seems  broad  enough  to 
confer  authority  upon  the  appraiser  to  determine  the 
question  of  residence  in  the  first  instance,  as  he  is  di- 
rected not  only  to  issue  subpoenas,  compel  attendance  of 
witnesses,  take  evidence  of  such  witnesses  under  oath, 
and  report  the  same  in  writing  to  the  surrogate,  but  he  ia 
also  directed  to  report  ^  *  such  other  facts  in  relation  there- 
to, and  to  said  matter  as  the  surrogate  may  order  or 
require,^'  and  the  general  practice  has  been  for  the  Ap- 
praiser to  take  the  proof  in  relation  to  the  decedent's 
residence  and  report  the  same  with  his  conclusions  to 
the  surrogate.''  McElroy  on  the  Transfer  Tax  Law 
(N.  Y.),  2nd  Ed.  206. 


200 

313.  Appraiser — County  Judge  May  Appoint  be- 

fore Claims  Are  Ascertained. 

The  County  Judge  has  power  to  appoint  an  Appraiser 
and  impose  the  tax  due  before  it  is  ascertained  what 
claims  were  owing  by  decedent  at  the  time  of  death. 
Matter  of  Westurn,  152  N.  Y.  93. 

314.  Appraiser  Cannot  Decide  Question  of  Law. 

An  Appraiser  is  without  power  to  determine  the  ex- 
emptions of  beneficiaries ;  this  power  is,  by  statute,  con- 
ferred on  the  surrogate.  (Laws  of  1885.)  Re  Viander- 
hilt's  Estate,  10  N.  Y.  S.  239;  Re  Astor,  2  N.  Y.  S.  630. 

315.  Appraiser — May  Hear    Evidence   on  Deduc- 

tions. 

The  law  gives,  an  Appraiser  power  to  take  evidence  on 
deductions.    Wormser's  Estate,  73  N.  Y.  S.  748. 

316.  Evidence — Presumption  in  Absence  of  Proof 

of  Jurisdictional  Facts. 

The  record  must  disclose  all  material  facts  that  are 
desired  to  be  presented  to  the  Court  of  Eeview.  In  a 
case  where  the  record  did  not  disclose  that  the  property 
involved  was  within  or  without  the  State  and  where  no 
point  was  made  on  this  subject,  it  must  be  presumed  that 
the  transfer  of  the  property  was  made  within  the  State. 
Matter  of  Keeney,  194  N.  Y.  281. 

317.  Evidence  — Proof     Must      Clearly      Identify 

Property    Alleged    to    Have    Been    Trans- 
ferred by  Death. 

'w 

In  1896,  more  than  five  years,  prior  to  the  death  of 
testator,  it  was  claimed  by  a  witness  that  the  testator 
exhibited  to  him  securities  in  a  safe  deposit  box  alleged 


201 

to  be  worth  $700,000.00.  The  executor  did  not  account 
for  that  sum  or  explain  where  the  securities  were.  The 
witness  did  not  handle  the  securities  and  all  he  knew  was 
the  alleged  value  thereof  as  stated  by  testator.  The  wit- 
ness, was  hostile  to  the  estate  of  testator.  The  develop- 
ment of  these  facts  did  not  shift  the  burden  of  proof  to 
the  executor  and  the  evidence  was  held  insufficient  to 
sustain  a  tax  thereupon.  Matter  of  Kennedy,  113  App. 
Div.  (N.  Y.)  4. 

318.  Evidence — Presumption     "When     Deposit    in 

Name  of  Husband  and  "Wife. 

In  an  appraisement  proceeding  the  following  evidence 

was  evolved  relative  to  the  right  of  the  surviving  widow 

in  a  savings  account  standing  in  her  name  and  that  of 

her  deceased  husband. 

'^Deponent  further  says  that  the  deposits  in  the 
foregoing  savings,  banks,  except  the  deposit  in  the 
Irving  Savings  Bank,  are  made  to  Frederick  Wil- 
kens,  the  decedent,  and  to  Mary  Wilken,  his  wife, 
this  deponent ;  that  the  deposits  were  made  from  the 
earnings  jointly  acquired  by  deponent  and  the  said 
Frederick  Wilkens  in .  the  prosecution  of  a  retail 
liquor  saloon  business  in  the  City  of  New  York, 
which  was  sold  in  the  year  1906.'' 

Held,  to  be  sufficient  to  raise  a  presumption  of  equal 
ownership.    Re  Wilkens  Estate,  129  N.  Y.  S.  600. 

319.  Evidence— Must  Show  Income  Reserved. 

In  establishing  the  taxability  of  property  transferred 
in  the  lifetime  of  a  donor,  evidence  must  be  produced 
which  clearly  shows  that  the  income  from  such  property 
transferred  was  reserved  to  the  donor.  Matter  of  Thome, 
44  App.  Div.  (N.  Y.)  8. 


202 

320.  Joint  Stock  Association— Real  Estate  to  be 

Considered  in  Valuation. 

Shares  of  stock  of  a  joint  stock  association  owning  real 
estate,  are  properly  valued  by  including  the  real  estate 
as  part  of  the  assets  of  the  association.  Be  Jones,  59 
N.  Y.  S.  983;  172  K  Y.  575. 

321.  Appraiser — Report  May  be  Returned  for  Ad- 

ditional Proof. 

**The  Appraiser's  report  may  be  sent  back  to  him  for 
additional  proof  in  case  the  surrogate  has  not  acted  upon 
it.  {Matter  of  Kelley,  29  Misc.  Eep.  (N.  Y.)  169.)" 
Greene's  Law  of  Taxable  Transfers,  2nd  ed.  77. 

322.  Appraisement— Second   Appraisal    not   Per- 

missible to  Increase  Value  of  Assets. 

Property  fairly  appraised  in  a  regular  proceeding  un- 
der the  Tax  Law  cannot  be  subjected  to  a  second  ap- 
praisement in  order  to  increase  its  value.  The  fact  the 
property  may  have  been  sold  after  the  first  appraise- 
ment at  a  higher  value  than  fixed  therein  is  not  material. 
Matter  of  Rice,  29  Mis.c.  Eep.  (N.  Y.)  404. 

323.  Increase  or  Decrease  in  Value  after  Deatb 

not  Material. 

The  increase  or  accumulation  of  property  after  the 
death  of  the  owner  cannot  be  subjected  to  a  tax.  The 
fact  that  the  property  may  have  depreciated  in  value 
after  the  death  does  not  change  the  rule  of  fixing  the 
value  as  of  the  date  of  death.  Re  Hite,  113  Pac.  (Cal.) 
1072. 

324.  Appraisement — Title    of    Case    Must    be    in 

Name  of  Donor  of  Power. 

The  title  of  an  appraisement  should  be  in  the  name 


203 

of  the  donee  of  the  power  exercised,  when  the  proceeding 
is  designed  to  cover  property  passing  by  such  transfer. 
Matter  of  Lowndes,  60  Misc.  Rep.  (N.  Y.)  506. 

325.  Appraisement— Property     not     Included     in 

Appraisement    Can    be    Subsequently    Ap« 
praised. 

Subsequent  to  the  appraisement  of  the  estate  of  Mrs. 
Lansing,  who  died  in  October,  1893,  it  was  determined 
that  property  purported  to  have  been  assigned  by  Mrs. 
Lansing  to  her  daughter  belonged  to  said  deceased.  This 
property  was  not  included  in  the  appraisement.  The 
Court  held  the  surrogate  had  power  to  appoint  another 
appraiser  to  appraise  the  property  purported  to  have 
been  assigned,  but  which,  in  fact,  belonged  to  Mrs.  Lan- 
sing at  the  time  of  her  death.  Matter  of  Lansing,  31 
Misc.  Rep.  (N.  Y.)  148. 

326.  Appraiser — ^If  in  Doubt    Reports    Property 

Taxable. 

Should  questions  be  raised  in  an  appraisement  creat- 
ing a  doubt  in  the  appraiser  as  to  the  taxability  of  prop- 
erty, his  report  should  include  it  and  recommend  it  for 
taxation.    Re  Astor,  17  N.  Y.  St.  Eep.  787. 

327.  Appraiser — Duty  Ended  xrith  Report. 

When  the  appraiser  returns  his  report  to  the  County 
Judge  his  duty  is  ended.  Matter  of  Ludlow,  4  Misc.  Rep. 
(N.  Y.)  594. 

328.  Misappropriation  of  Property  by  Executor 

Does    not    Relieve    from    Taxation    as    of 
Death  of  Decedent. 

In  an  appraisement  of  decedent's  estate,  under  the 
California  Laws  of  1905,  it  appeared  that  misappropria- 


204 

tion  of  funds  was  made  by  executor,  thereby  reducing  tbe 
total  amount  of  the  estate,  and  it  was  urged  that  the 
amount  of  taxable  property  should  be  reduced  to  the  ex- 
tent of  such  loss.  Held,  that  all  property  that  passed  at 
death  was.  taxable,  and  the  amount  lost  by  misappropria- 
tion must  be  included.  Be  Bites  E state ^  113  Pac.  (Cal.) 
1072. 

329.  Market  Value — Fixed  as  of  Date  of  Death. 

The  value  of  property  is  fixed  as  of  the  date  of  deced- 
ent's death.  {Be  Graves,  242  111.  212;  Ayers  v.  Title  & 
Trust  Co,,  187  111.  42;  People  v.  Nelms,  241  111.  571.) 

*  *  The  true  test  of  value  by  which  the  tax  is  to  be  meas- 
ured is  the  value  of  the  estate  at  the  time  of  the  trans- 
fer of  title.''  Matter  of  Davis,  4A  N.  E.  185-187;  149 
N.  Y.  539. 

330.  Fair  Market  Value— Listed  Stocks,  Etc. 

In  an  appraisement  of  the  estate  of  Silas  B.  Cobb,  in 
which  there  were  holdings  of  large  blocks,  of  the  capital 
stock  of  various  corporations,  the  question  arose  whether 
sales  on  the  Chicago  Stock  Exchange  of  small  blocks  of 
stock  of  the  same  kind  as  inventoried  was  the  proper 
basis  of  valuation,  in  view  of  the  probability  that  an 
offer  on  the  stock  exchange  of  the  entire  block  or  blocks 
of  stock  held  by  the  executor  might  cause  a  large  depre- 
ciation in  the  market.    The  Court  held: 

''One  of  the  witness.es  testified  that  if  6,237  shares 
of  Kailway  Company  stock  were  forced  upon  the 
market  at  one  time  the  price  of  stock  would  be  di- 
minished and  bring  much  less  than  the  value  as 
shown  by  the  sale  of  a  small  block  of  stock  on  the 
date  of  death." 

The  same  testimony  was  offered  in  regard  to  the  other 
securities.     The  Court  held: 


205 

**As  we  understand  the  position  of  counsel  for  ap- 
pellants, it  is  that  the  market  price  of  these  stocks 
should  have  been  fixed  at  the  market  price  as  it 
would  be  on  a  certain  day,  in  case  the  entire  hold- 
ings were  forced  upon  the  market,  and  a  forced  sale 
of  the  same  was  made  without  regard  to  the  actual 
value  of  the  stock  per  share,  or  the  ordinary  method 
of  doing  business,  in  reference  to  handling,  purchas- 
ing or  selling  the  same.  We  are  unable  to  concur 
in  the  correctness  of  this  view. 

The  property  here,  valued  as  it  was,  was  valued  at 
the  fair  cash  market  value  thereof.  Fair  market 
value,  as  applied  in  this  case,  is  not  what  the  stocks 
would  bring  at  a  forced  sale,  but  what  they  would 
bring  at  a  sale  after  due  notice  of  the  facts,  and 
under  fair  conditions  in  the  ordinary  course  of  busi- 
ness. The  Inheritance  Tax  Law  provides  the  method 
and  machinery  for  the  valuation  of  property  coming 
within  the  operation  of  the  law.  Section  1  of  the 
statute  uses  the  expression  ^  clear  market  value  of 
such  property  received  by  each  person.'  Section  ll 
uses  the  phrases,  Value,'  *fair  market  value,'  and 
'cash  value.'  In  arriving  at  the  fair  value  of 
property,  the  Appraiser,  under  the  Act,  has  to  be 
guided  by  the  fair  market  value  thereof,  and  in  as- 
certaining the  same  is  authorized  to  call  witnesses 
for  that  purpose.  Under  the  Act,  the  Appraiser  and 
the  County  Judge  and  the  County  Court  are  not  lim- 
ited in  the  valuation  of  property  to  the  market  quo- 
tations of  the  same,  but,  for  the  purpose  of  finding 
the  fair  cash  value  of  the  same,  they  may  use  the 
quotations  of  the  same  on  the  public  exchanges,  pri- 
vate sales  of  such  property,  testimony  as  to  the 
actual  value  of  the  same,  and  their  own  knowledge 
of  the  subject-matter. 

*Fair  market  value'  has  never  been  construed  to 
mean  the  selling  price  of  property  at  a  forced  or 
voluntary  sale.  In  Peoria  Gas  Light  Co.  v.  Peoria 
Terminal  Railway  Co.,  146  111.  372,  it  was  said  (p. 
377) :  'The  theory  upon  which  evidence  of  sales  of 
other  similar  property  in  the  neighborhood  at  about 
the  same  time  is  held  to  be  admissible,  is  that  it  tends 
to  show  the  fair  market  value  of  the  property  sought 


206 

to  be  condemned.  *  *  *  But  it  seems  very  clear 
that,  to  have  that  tendency,  they  must  have  been 
made  under  circumstances  where  they  are  not  com- 
pulsory, and  where  the  vendor  is  not  compelled  to 
sell  at  all  events,  but  is.  at  liberty  to  invite  competi- 
tion among  those  desiring  to  become  purchasers.' 

The  very  fact  that  the  market  would  be  depressed 
by  forcing  large  blocks  of  stock  upon  it,  and  forcing 
such  large  blocks  of  stock  to  sale,  indicates  that  such 
a  sale  is  not  a  proper  test  of  the  fair  cash  value  of 
the  stock. 

It  has.  been  held  in  the  State  of  New  York,  in  pass- 
ing upon  the  method  adopted  by  an  Appraiser  in  his 
appraisement  of  large  quantities  of  stocks  and  se- 
curities, that  the  correct  rule  was  adopted  where  the 
Appraiser  based  his  appraisal  upon  public  sales  of 
securities  at  the  stock  exchange.  {In  re  Gould^s  Es- 
tate, 46  N.  y.  S.  506;  People  v.  Coleman,  107  N.  Y. 
544.) 

In  re  Gould's  Estate,  supra,  it  was  said:  *It  is 
claimed,  however,  that  the  rule  should  be  so  con- 
strued that,  when  the  value  of  large  blocks  of  stock 
is  involved,  only  the  purchase  and  sale  in  markets  of 
correspondingly  large  blocks  of  stock  should  be  con- 
sidered, upon  the  theory  that  such  large  blocks  would 
necessarily  sell  at  lower  rates  than  small  quantities 
of  stock  sold  separately,  and  that  throwing  large 
blocks  of  stock  upon  the  market  all  at  once  would 
have  a  tendency  to  produce  a  break  in  the  market, 
and  perhaps  a  total  inability  to  get  more  than  a 
mere  nominal  price  oifered  for  that  stock.  *  *  * 
Under  the  construction  contended  for,  the  securi- 
ties involved  in  this  proceeding  might  have  been 
shown  to  be  of  little  or  no  value,  by  considering  that 
forcing  them  upon  the  market  in  large  blocks  at  one 
time  would  break  the  market,  and  make  them  prac- 
tically unsalable  at  all.  The  rule  adopted  by  the 
Appraiser  was  the  correct  rule,  and  he  apparently 
applied  it  properly  in  determining  the  value  of  the 
large  amount  of  securities  belonging  to  the  deced- 
ent's estate.'  "    Walker  v.  People,  192  111.  106. 


207 

331.  Market  Value — Public  Sales  of  Securities. 

Public  sales  of  securities  on  the  Stock  Exchange  is  a 
proper  basis  for  the  valuation  of  securities  for  the  pur- 
poses of  an  appraisement  under  the  Transfer  Tax  Law. 
**The  market  value  of  any  stock  which  is  listed  at  the 
Stock  Exchange  in  New  York  and  largely  dealt  in  from 
day  to  day  for  a  series  of  months  will  usually  furnish 
the  best  measure  of  value  for  all  purposes.  The  competi- 
tion of  sellers  and  buyers,  most  of  them  careful  and  vig- 
ilant to  take  account  of  everything  affecting  the  value  of 
stock  in  which  they  deal  and  each  mindful  of  his  own 
interests  and  seeking  for  some  personal  gain,  will  almost 
universally,  if  time  sufficient  be  taken,  fumisii  the  true 
measure  of  the  actual  value  of  stock."  Mutter  of  Gould, 
19  App.  Div.  (K  Y.)  352. 

332.  Market     Value  —  Synonymous     xirith      True 

Value. 

True  value  is  synonymous  with  **real"  or  market 
value.    Mayor,  etc.,  v.  Tunis  (N.  J.),  78  Atl.  1066. 

333.  Market  Value — Fixed  at  Transfer  or  When- 

ever Ascertainable. 

Whenever  the  appraisal  is  made,  the  value  of  the  prop- 
erty is  to  be  appraised  according  to  the  fair  and  clear 
market  value  of  the  interest  at  the  time  of  the  death  of 
the  testator.  The  command  of  the  statute  as  it  stood 
when  this  proceeding  was  instituted  was  to  make  the 
appraisal  immediately  after  the  transfer  at  the  fair  and 
clear  market  value  thereof  at  that  time,  but  if  the  inter- 
est was  of  such  a  nature  that  its  fair  and  clear  market 
value  could  not  then  be  ascertained,  it  was  to  be  ap- 
praised whenever  such  value  could  be  ascertained.  Mut- 
ter of  Sloane,  154  N.  Y.  109. 


208 

334.  When  no    Market  Value — Actual    Value   is 

Taken. 

In  determining  the  value  of  shares  of  stock  of  a  close 
corporation,  which  shares  were  not  sold  publicly,  the 
Court  sustained  an  Appraiser  in  basing  his  value  upon 
the  actual  worth  of  s.ecret  remedies,  good  will,  assets  and 
earning  capacity  of  the  corporation.  Matter  of  Brand- 
reth,  28  Misc.  Eep.  (N.  Y.)  468. 

335.  Market  Value — Isolated  Record  Sales  do  not 

Determine. 

In  the  valuation  of  the  stock  of  a  close  corporation 
whose  shares  were  owned  by  a  family,  but  for  which 
$110.00  per  share  had  been  bid  for  the  common  and 
$107.00  had  been  reported  as  the  price  of  the  sale  of 
preferred,  and  which  said  stock  paid  in  dividends  annu- 
ally ten  per  cent,  on  the  common  and  seven  per  cent,  on 
the  preferred,  the  Court  held:  No  evidence  was  given 
as  to  the  intrinsic  value  of  the  stock  outside  of  the  fact 
that  it  paid  certain  dividends.  *^We  may,  however,  take 
judicial  notice  of  the  fact  that  the  value  of  industrial 
stocks  often  does  not  bear  close  apparent  relations  to 
the  rate  of  dividends,  which  they  may  happen  to  pay  at 
a  given  time,  and  the  latter  is  not  by  any  means  a  con- 
trolling gauge  of  values.''  {Re  Smith,  71  App.  Div. 
(N.  Y.)  605.)  It  was  determined  that  the  preferred  was 
worth  $97.50  and  the  common  $100.00.  Matter  of  Cur- 
tice, 111  App.  Div.  (N.  Y.)  230. 

336.  Market  Value— Wkere  Evidence  of  Sales  is 

not  Contradicted  or  Rebutted,  Such  Evi- 
dence Must  Prevail. 

Testatrix  died  a  resident  of  the  State  of  New  York  in 
March,  1897,  owning  shares  of  stock  in  a  close  corpora- 


209 

tion,  organized  under  the  laws  of  tlie  State  of  West  Vir- 
ginia, having  its  principal  place  of  business  at  Philadel- 
phia, Pennsylvania.  The  Appraiser  fixed  a  value  of 
$70,000.00  on  1,382  shares.  On  an  appeal  by  the  executor 
it  "was  developed  that  the  stock  paid  six  per  cent,  in  divi- 
dends between  March  and  December,  1896,  and  that  sub- 
sequent to  the  death  of  the  decedent,  the  stock  averaged 
ten  per  cent,  per  annum.  In  the  years  1896  and  1897 
stock  had  been  sold  for  $50.00  per  share ;  that  500  shares 
were  sold  at  $50.00  per  share  in  July,  1897.  An  officer 
of  the  company  testified  that  he  considered  $50.00  a 
share  a  fair  value.  There  was  no  evidence  as  to  the 
actual  earnings  of  the  company,  except  the  general  state- 
ment of  the  officers  of  the  company,  that  dividends  were 
declared  out  of  its  earnings,  and  there  was  no  other  evi- 
dence of  sales  or  bids  in  addition  to  the  above.  The 
Court  held :  We  do  not  think  the  evidence  adduced  would 
justify  a  finding  that  the  stock  was  worth  over  $50.00 
per  share.    Matter  of  Smith,  71  App.  Div.  (N.  Y.)  602. 

337.  Market  Value— Good  AVill  Can  be  Taken  into 

Account  in  Determining  Market  Value. 

In  an  appraisement  of  the  shares  of  a  newspaper  cor- 
poration it  was  held  that  the  good  will  of  the  company 
constituted  property  which  should  be  considered  in  ar- 
riving at  the  value  of  the  stock.  Re  Jones,  59  N.  Y.  S. 
983. 

338.  Range  of  Market. 

In  considering  the  length  of  time  constituting  a  rea- 
sonable period  within  which  to  consider  sales  of  securi- 
ties as  a  basis  of  valuation,  it  was  held  that  a  three- 
months,  period  was  reasonable.  Matter  of  Crary,  64  N. 
Y.  S.  566. 


210 
DEDUCTIONS. 


339.  In  General. 

All  enforceable  indebtedness  due  from  or  chargeable 
against  a  decedent,  in  Ms  or  her  lifetime,  and  unpaid  or 
discharged  at  the  time  of,  or  by  death,  and  which  is  col- 
lectible from  decedent's  estate,  when  properly  proven  in 
an  appraisement  proceeding,  is  deductible  from  the  gross 
assets  chargeable  therewith  and  is  not  subject  to  taxa- 
tion. 

The  tax  is  imposed  on  the  net  estate  or  property  trans- 
ferred. 

In  addition  to  the  indebtedness  of  a  decedent  the  costs 
of  administration  (Re  Graves,  242  111.  212;  Connell  v. 
Crosby,  210  HI.  380)  and  reasonable  funeral  expenses 
are  deductible,  although  no  express  provision  is  made  by 
the  tax  law  for  such  deduction.  In  the  administration 
cost  is  included :  executor  or  administrator  fees  and  the 
fees  of  the  attorney  for  executor  or  administrator  per- 
formed in  the  course  of  their  duties  as  s.uch.  Where  it  is 
necessary  for  an  executor  to  defend  a  will  or  codicil,  the 
fees  of  his  counsel  is  a  charge  deductible  from  the  assets 
of  the  estate  in  an  appraisement  proceeding.  (Connell 
V.  Crosby,  210  111.  380.) 

The  costs  of  the  Clerk  of  the  Court  of  Probate  are  de- 
ductible as  a  necessary  charge  against  the  assets. 

Mortgages  and  liens  chargeable  to  real  property  at  the 
time  of  death,  together  with  accrued  interest  to  that  date, 
should  be  deducted. 

340.  Amount  of  Administration  Fees  Allowed. 

Where  an  appraisement  is  closed  before  the  termina- 
tion >  of  the  administration,  it  is  practically  impossible 


211 

to  determine  the  amount  of  fees  that  will  be  earned  by 
either  the  executor,  administrator  or  attorney.  It  is 
true  there  is  a  maximum  percentage  fixed  by  law  for  the 
executor  or  administrator,  but  it  is  not  known  until  the 
termination  of  their  duties,  what  compensation  they  are 
entitled  to.  The  amount  of  fees  allowed  by  the  Court 
of  Probate,  when  based  on  service  performed,  may  be 
the  proper  amount  to  allow  as  a  deduction  in  the  ap- 
praisement, but  the  County  Judge  is  not  directed  by  law 
to  accept  the  opinion  of  the  Court  of  Probate. 

Fees  allowed  by  a  Court  of  Probate  based  upon  an 
agreement  of  parties  should  be  received  by  the  Appraiser 
as  information  only,  and  be  subjected  to  careful  exam- 
ination to  determine  whether  they  represent  a  fair 
amount  for  deduction. 

In  case,  however,  fees  have  been  paid  to  executor,  ad- 
ministrator and  attorneys  and  the  legal  representative 
discharged,  the  Appraiser  should  not  allow  more  than 
the  sum  actually  received  by  such  legal  representative 
and  attorney.  If  no  fees  were  paid,  none  should  be  al- 
lowed in  the  appraisement.  The  reason  for  this  is  mani- 
fest, in  that  the  tax  is  based  on  the  value  of  the  property 
transferred,  less  charges. 

Where  an  appraisement  is  closed  before  the  termina- 
tion of  administration,  the  practice  of  the  County  Judges 
of  Cook  County  has  been  to  direct  the  Appraiser  to  esti- 
mate an  amount  to  cover  fees  and  costs,  and  thus  avoid 
delaying  the  appraisement. 

341.  Attorney's  Fees  and  Executor's  Commis- 
sions for  Administration  and  Defending; 
Will— Claims  of  Non-Residents. 

William  Drury  died  a  resident  of  Illinois  on  March 
13th,  1897,  seized  and  possessed  of  real  estate  in  Illinois 


212 

of  the  value  of  $199,000.00 ;  personal  property,  $27,000.00, 
and  real  estate  in  Kansas,  Colorado,  Nebraska  and  Texas 
of  the  aggregate  value  of  $94,000.00.  Decedent's  indebt- 
edness totaled  $126,000.00  in  addition  to  costs  and  ex- 
penses of  settlement  of  the  estate.  All  of  the  indebted- 
ness was  due  creditors  who  resided  in  Illinois,  except  a 
note  of  $45,000.00  which  was  due  a  citizen  of  Minnesota, 
but  made  especially  payable  at  Keithsburg,  Mercer 
County,  Illinois.  The  Court  below  held  that  in  order  to 
ascertain  the  amount  on  which  to  compute  the  tax,  the 
value  of  the  personal  property  should  be  deducted  from 
the  total  indebtedness  of  the  estate  and  the  remaining 
indebtedness  should  be  apportioned  on  all  the  real  estate, 
either  foreign  or  domestic,  and  the  tax  laid  upon  lands 
in  Illinois,  less  the  apportionment.  On  review,  the  Su- 
preme Court  held: 

*^The  lands  in  the  sister  states,  were  not  subject  to 
any  specific  liens  to  secure  any  of  the  indebtedness 
or  specially  charged  with  the  payment  of  any  part 
of  it  by  any  act  of  the  testator,  nor  was  any  of  the 
indebtedness  due  to  any  citizen  of  any  sister  state  in 
which  such  lands  were  situate.  This  ruling  operated 
to  increase  the  amount  on  which  the  tax  was  re- 
quired to  be  paid  to  the  extent  that  the  remainder  of 
the  indebtedness  was  so  apportioned  on  the  lands  in 
sister  states,  and  by  indirection  laid  a  tax  on  the 
foreign  lands,  which,  as  we  have  seen,  could  not  be 
lawfully  directly  imposed  thereon.  The  ruling  was 
erroneous.  If  the  foreign  lands  had  in  any  way  been 
subject  to  an  encumbrance  or  lien,  vendor's  or  other- 
wise, to  secure  the  payment  of  indebtedness,  of  the 
testator,  or  if  the  indebtedness  had  been  due  to  a 
citizen  of  the  sister  state  wherein  was  situated  the 
real  estate  belonging  to  the  decedent,  a  different 
question  might  be  presented. ' ' 

Another  question  arose  in  this  case  relative  to  the  de- 
duction of  $12,000.00  expended  by  the  executors  in  em- 


213 

ploying  counsel  to  defend  the  will  of  decedent.  The 
Court  held,  upon  this  question,  that  the  expenses  in  de- 
fense of  the  will  should  have  been  deducted  and  that  ad- 
ministrator's and  solicitor's  fees  in  the  administration 
is  a  proper  deduction.    Connell  v.  Crosby,  210  111.  380. 

342.  Deductions  Must  be  Presented  at  Appraise- 

ment^ — Not  Afterward. 

Deductions  not  presented  to  the  Appraiser  cannot  be 
allowed  by  the  surrogate,  on  motion  to  amend  order  of 
tax.  Matter  of  Morgan,  36  Misc.  Rep.  (N.  Y.)  753;  74 
N.  Y.  S.  478. 

343.  Allowance  of  Decedent's  Debts. 

**  Where  no  proof  is  made,  except  by  an  affidavit  of  an 
attorney  at  law,  that  a  claimed  creditor  was  advised  that 
by  a  true  construction  of  an  agreement  he  was  entitled 
to  claim  as  survivor,  and  that  the  children  of  the  deced- 
ent who  took  his  estate  were  also  so  advised,  there  is  no 
proper  evidence  of  the  existence  of  a  claim,  and  nothing 
upon  which  a  deduction  for  it  could  be  allowed.  {Matter 
of  Wormser,  51  App.  Div.  (N.  Y.)  441;  modifying  28 
Misc.  Rep.  (N.  Y.)  608."  Greeners  Law  of  Taxable 
Transfers,  39. 

344.  Commissions  of  Administrator. 

Fees  of  an  administrator  should  be  allowed  as  a  de- 
duction in  determining  the  net  taxable  assets.  Matter 
of  Westurn,  152  N.  Y.  93. 

345.  Commissions  of  Administrator — May  be  Esti- 

mated. 

The  fees  of  an  administrator  is  a  proper  deduction 
from  the  assets  of  an  estate.    The  Appraiser  may  esti- 


214 

mate  the  total  fees  allowable,  if  administration  is  not 
closed  at  the  time  of  the  tax  proceeding.  Matter  of 
Gould,  46  N.  Y.  S.  506. 

346.  Expenses  of  Administration. 

Expenses  of  administration,  being  a  charge  on  the 
estate,  and  not  to  the  legatees  or  devisees,  are  proper 
deductions.  In  the  contest  of  the  probate  of  a  will  the 
fees  of  a  temporary  administrator  are  proper  deductions. 
The  transfer  tax  is  on  the  succession  of  the  legatee,  de- 
visee or  heir  who  takes  what  remains  of  the  estate  on 
distribution  after  settlement.  The  amount  represented 
by  the  administration  expenditures  never  passes  to  the 
legatee.  {Matter  of  Westurn,  152  N.  Y.  93,  distin- 
guished.) Matter  of  Gihon,  169  N.  Y.  443,  modifying  64 
App.  Div.  (N.  Y.)  504. 

347.  Real  Estate  Taxes — Deductible. 

C.  E.  Detmold  died  testate  a  resident  of  New  York, 
July  2d,  1887.  His  will  transferred  all  his  property  to 
his  daughters  for  life,  with  remainder  to  their  issue — 
all  of  which  property  was  subject,  however,  to  a  certain 
annuity  payable  to  his,  wife.  Decedent's  real  estate  had 
been  assessed  previous  to  his  death  for  the  general  taxes 
of  1887  and  the  assessment  rolls  ^^had  been  delivered  to 
the  aldermen  for  the  ascertainment  of  the  amount  of  the 
tax  and  its  extension  by  them  upon  the  rolls.''  It  was 
claimed  by  the  remaindermen  that  these  general  taxes 
should  be  paid  from  the  income  of  the  estate  going  to  the 
life  tenants  and  that  it  was,  therefore,  improperly 
charged  by  the  executors  as  liabilities  of  the  estate  of 
decedent.  The  sole  question  was,  whether  such  taxes  con- 
stituted a  liability  of  the  estate.  Held,  that  a  construc- 
tion of  the  general  laws  of  New  York,  which  construction 


215 

would  be  governed  somewhat  by  an  endeavor  to  protect 
the  State,  makes  such  taxes  a  charge  against  decedent's, 
es.tate.    Matter  of  Bahcock,  115  N.  Y.  450. 

348.  General  Revenue  Taxes  Charged  to  Real  Es- 

tate Should  be  Deducted. 

Real  estate  taxes  chargeable  to  decedent's  real  estate 
prior  to  his  death  are  deductible  in  an  appraisement  pro- 
ceeding.   Eg  Liss'  Estate,  78  N.  Y.  S.  969. 

349.  General  Revenue  Tax — When  not  Deductible 

in  an  Appraisement. 

Real  estate  taxes  are  not  deductions  until  they  are 
fixed  and  become  a  debt  against  the  land.  **  Taxation 
cannot  create  a  debt  until  there  is  a  tax  fixed  in  amount 
and  perfected  in  all  respects.  It  is  not  enough  to  lay  the 
foundation,  but  the  structure  must  be  built.  There  can 
not  be  a  complete  tax  upon  real  estate  until  it  is  s.o  per- 
fected as  to  become  a  lien,  because  until  then  the  amount 
cannot  be  known.  (BucJcout  v.  Citi/  of  New  York,  176 
N.  Y.  363 ;  68  N.  E.  659.) ''  {In  re  Freimd's  Estate,  128 
N.  Y.  S.  48. 

350.  Trustees — Commissions  not  Deductible. 

Trustees  objected  to  an  order  fixing  tax  approving  an 
Appraiser's  report  on  the  ground  that  the  Appraiser  re- 
fused to  allow  trustee's  commission.  The  Court  held: 
There  is  no  doubt  as  to  the  correctness  of  deducting  com- 
missions of  an  executor  or  administrator.  When  the 
executor  is  discharged  and  the  property  turned  over  to 
the  trustee  ^  *  for  the  benefit  of  those  ultimately  entitled  to 
receive  it,  it  is  in  the  nature  of  a  luxury  for  the  benefi- 
ciaries''  and  the  beneficiaries  should  pay  and  be  charged 
with  the  cost  of  maintaining  the  trust.    There  is  no  sub- 


216 

stantial  reason  why  the  State  should  have  the  tax  dimin- 
ished by  the  fees  of  a.  trustee.  Matter  of  Becker,  26  Misc. 
Bep.  (N.  Y.)  633. 

351.  Deductions — Mortgages  not  Deductible  from 

Personalty. 

An  Appraiser  should  not  deduct  mortgages  upon  real 
estate  from  the  personal  property  because  of  a  direction 
in  a  will  to  that  effect.  Matter  of  Berry,  23  Misc.  Eep. 
(N.  Y.)  230.  Re  Livingston,  1  App.  Div.  (N.  Y.)  568; 
Re  Offerman,  25  App.  Div.  (N.  Y.)  94.  Matter  of  Sutton, 
3  App.  Div.  (N.  Y.)  208. 

352.  Inheritance  Tax—- Not  Deductible. 

Testator  directed  his  executor  to  satisfy  the  Inher- 
itance Tax  out  of  his  residuary  estate.  Held  that  the 
Inheritance  Tax  assessable  was  not  deductible.  Re  Sivift, 
137  N.  Y.  77. 

353.  Deductions — Inheritance  Tax. 

The  Federal  Inheritance  Tax  is  not  a  legal  deduction. 
Matter  of  Gihon,  169  N.  Y.  443;  Matter  of  Becker,  26 
Misc.  Eep.  (N.  Y.)  633.  Re  Curtis,  31  Misc.  Eep.  (N.  Y.) 
83;  Matter  of  Irish,  28  Misc.  Eep.  (N.  Y.)  647. 

354.  Burial  liot— When  Cost  is  Deductible. 

The  expense  of  a  burial  lot  is  deductible.  Re  Liss* 
Estate,  78  N.  Y.  S.  969. 

355.  Deductions  —  Second  Appraisement  -~  Assets 

Increased    by    Defeating    Claims    Against 
Estate. 

After  an  appraisement  has  been  completed,  and  time 


217 

of  appeal  had  expired,  the  executor  of  the  estate  suc- 
ceeded in  defeating  certain  claims  which  had  been  al- 
lowed by  the  Appraiser  as  deductions.  This  increased 
the  ass.ets  of  the  estate.  Held,  that  a  new  appraisement 
of  such  assets  accruing  by  reason  of  the  success  of  the 
executor  in  defeating  claims  could  not  be  had.  Re  Rice, 
29  Misc.  Eep.  (N.  Y.)  404. 

356.  Doubtful  Deductions  Rejected. 

If  a  claim  is  not  admitted  by  the  executor,  and  if  such 
claim  will  be  contested  it  should  not  be  allowed  as  a 
deduction.  Neither  should  the  question  be  reserved  until 
settlement  of  the  claim.  Re  Rice,  29  Mis.c.  Eep.  (N.  Y.) 
404. 

357.  Deduction — Note  in  Litigation. 

When  part  of  the  assets  of  an  estate  consist  of  a  note 
upon  which  the  administrator  has  brought  suit  for  col- 
lection such  note  should  not  be  valued.  This  note  is  tax- 
able when  determined  to  be  good.  Matter  of  Westurn, 
152  N.  Y.  93. 

358.  Deductions — ^Legal  Services  for  Construction 

of  Will. 

An  Appraiser  allowed  $3,500.00  to  cover  the  probable 
expenses  of  a  suit  to  construe  a  will.  This,  action  was 
brought  by  said  executors,  both  in  their  individual  and 
representative  capacity.  The  Court  held:  **The  action 
(suit  to  construe  will)  would  seem  unnecessary,  as  any 
question  that  may  arise  can  readily  be  settled  in  the  Sur- 
rogate's Court  by  the  decree  for  distribution.  Further, 
it  would  appear  that  its  principal  object  is  to  benefit  the 
personal  interests  of  the  executors.  Sum  of  $3,500.00 
disallowed.  Matter  of  Thrall,  30  App.  Div.  (N.  Y.)  271. 
Aff 'd  Matter  of  Thrall,  157  N.  Y.  46. 


218 

359.  Deductions — Expenses  of  liitigation  betiveen 

Distributees  not  Deductible. 

Where  distributees  of  an  estate  involve  themselves 
in  litigation,  the  cost  of  such  litigation  is  not  deductible. 
Such  cost  is  in  no  sense  a  charge  of  administration  of  the 
estate.    Re  Sanford's  Estate,  123  N.  Y.  S.  284. 

360.  Ante-Nuptial  Contract  Does  not  Create  an 

Indebtedness   of  the   Estate. 

Money  paid  to  a  widow  in  lieu  of  dower  and  of  all 
other  interests  she  has.  as  widow  pursuant  to  the  terms 
of  an  ante-nuptial  contract  is  not  a  legal  deduction  from 
the  estate  of  husband.  People  v.  Estate  of  Marshall 
Field,  248  111.  147. 

361.  Debts    of    Non-Resident    Estate^What    De- 

ductible from  Neiv  York  Assets. 

'*In  valuing  stocks  and  bonds  owned  by  a  nonresident 
decedent,  but  actually  within  the  State  of  New  York, 
general  indebtedness  of  the  decedent  to  creditors  in  New 
York  should  not  be  offset  against  such  assets,  particu- 
larly when  such  creditors  have  in  their  hands  the  legal 
title  and  the  right  to  resort  for  the  payment  of  their 
debts  to  securities  belonging  to  the  decedent  which  are 
not  taxable  under  the  laws  of  New  York.  (Matter  of 
Pullman,  46  App.  Div.  (N.  Y.)  574.)''  Greene's  Law  of 
Taxable  Transfers,  40. 

362.  Deductions — Fro  Rated  in  Non-Resident  Es- 

tates. 

In  an  appraisement  under  the  Transfer  Tax  Laws  of 
New  York,  1908,  which  provides  in  substance  that  when- 
ever the  property  of  a  resident  deceased,  or  of  a  non- 
resident decedent,  within  the  state,  transferred  by  will  isi 


219 

not  specifically  bequeathed,  such  property  shall  be 
deemed  for  the  purpose  of  taxation  to  be  transferred  pro 
rata  among  all  of  the  general  legatees,  including  resid- 
uary legatees,  the  Court  held :  That  executor  could  not 
elect  property  for  the  payment  of  general  bequests ;  that 
all  of  the  property  of  decedent  must  be  distributed  pro 
rata;  that  deductions  should  be  pro  rated;  Be  Porter's 
Estate,  124  N.  Y.  S.  676.  Re  Gordon's,  186  N.  Y.  471. 
(See  Matter  Grosvenor,  124  App.  Div.  (N.  Y.)  331.) 

363.  Debts — When  Chargeable  to  Assets  at  Domi- 

cile  of  Non-Resident   Deductions    Should 
be  Proportioned. 

The  Collateral  Inheritance  Tax  Law  of  the  State  of 
Iowa  provides  for  a  tax  on  nonresidents,  upon  the  prop- 
erty transferred  by  death  when  within  the  jurisdiction> 
of  said  State.  Such  property  is  chargeable  with  the 
debts  of  the  estate  pro  rated  according  to  the  percent- 
age which  the  property  in  Iowa  bears  to  the  entire  es- 
tate.   Wieting  v.  Morrow,  132  N.  W.  193. 

364.  Apportionment   of    Debts    betxreen    Exempt 

and  Non-Exempt  Property. 

Debts  of  a  decedent  are  chargeable  to  his  entire  es- 
tate and  not  to  a  particular  part  of  his  estate,  thus  when 
decedent  owned  government  bonds  exempt  from  taxa- 
tion, the  debts  were  not  all  deductible  from  the  taxable 
property,  but  should  be  pro  rated  between  the  taxable 
and  not  taxable  property.  Matter  of  Purdy,  24  Misc. 
Eep.  (N.  Y.)  301. 

365.  When  One  Co-Tenant  Furnishes  Money  for 

Improvements. 

Money  expended  on  permanent  improvements  by  a 
<io-tenant  when  in  excess  of  an  expenditure  of  the  de- 


220 

ceased  co-tenant,  should  be  equalized  by  deducting  the 
excess  from  decedent's  estate.  Re  Woods  Estate,  123 
N.  Y.  S.  574. 

366.  Appeal — County  Judge  to  County  Court. 

Any  person  dissatisfied  with  the  appraisement  or  as- 
sessment may  appeal  to  the  Comity  Court.  The  Appeal 
lies  from  the  County  Judge's  order  of  tax.  Re  Sholem, 
238  lU.  203. 

367.  County  Court  to  Supreme  Court. 

The  appeal  from  a  judgment  of  the  County  Court  lies 
direct  to  the  Supreme  Court.    Re  SJiolem,  238  HI.  203. 

368.  Practice  in  Cook  County,  Illinois. 

By  practice  in  the  County  Court  of  Cook  County,  it  is 
necessary  for  the  appellant  to  set  forth  the  grounds  of 
appeal  in  a  petition.  The  appeal  is  perfected  by  giving 
satisfactory  bond  within  sixty  days  from  the  entry  of  the 
County  Judge's  order  of  tax.  The  amount  of  the  bond 
is  usually  twice  the  tax  and  interest,  and  sureties  must 
generally  schedule  real  estate  clear  of  liens  or  other 
property  sufficient  to  insure  a  prompt  liquidation  in  a 
suit  by  the  State. 

369.  Appeal — De  Novo — Common  Laxir  Proceeding; 

—Bill  of  Exceptions. 

An  appeal  in  the  County  Court  is  a  de  novo  trial  and 

a  common  law  proceeding. 

**  Exceptions  as  to  the  admission  of  evidence  and 
as  to  the  sufficiency  of  the  evidence  to  sustain  the 
finding  of  the  trial  court  must  be  preserved  by  bill 
of  exceptions  as  in  common  law  proceedings."  Peo- 
ple V.  Mills,  247  111.  620;  People  v.  Moir,  207  111.  180. 


221 

370.  Notice  of  Appeal — Attorney  for  State  Comp- 

troller Cannot  "Waive   and   Confer  Juris- 
diction. 

The  admission  by  the  attorney  for  the  State  that  no- 
tice of  appeal  was  served  within  the  statutory  period 
does  not  confer  jurisdiction,  if  the  time  of  appeal  has 
expired.    Re  Seymour's  Estate,  128  N.  Y.  S.  775. 

371.  Appeal. 

Additional  allegations  to  the  petition  of  appeal  may 
be  filed  by  appellant,  even  though  motion  is  not  made  un- 
til after  the  expiration  of  the  sixty  day  period  provided 
for  perfecting  appeal.    Matter  of  Westurn,  152  N.  Y.  93. 

372.  Appeal — Is  Necessary  to  Review  Correctness 

of  Assessment— Deductions   Must  Be  Pre- 
sented to  Appraiser. 

After  the  time  for  appeal  had  expired,  the  adminis- 
tratrix by  motion,  requested  that  the  order  of  tax  be 
amended  by  deducting  from  the  total  property  apprais- 
able,  physicians,  undertakers,  cemetery  and  other  charges 
that  she  had  not  presented  in  the  appraisement.  The 
Court  held,  that  she  had  full  opportunity  to  present  the 
claims  before  the  appraiser.  Further,  that  the  statute 
provided  a  method  for  reviewing  all  questions  by  ap- 
peal within  sixty  days  from  the  date  of  the  order,  and 
that  the  administratrix  was  barred.  Matter  of  Racket, 
14  Misc.  Rep.  (N.  Y.)  282. 

373.  Executor  May  Appeal. 

The  executor  is  an  interested  party.  The  Tax  Law 
makes  him  personally  liable  for  the  payment  of  the  tax. 
Being  an  *  interested  party''  he  may  appeal  from  the 
order  of  tax.  Matter  of  Cornell,  Q^  App.  Div.  (N.  Y.) 
162,  modified  in  170  N.  Y.  423. 


222 

374.     United  States  Supreme  Court — Wlien    Con- 
struction of  State  Court  "Will  be  Followed. 

**  While  it  is  settled  law  that  this  court  will  fol- 
low the  constniction  put  by  the  state  courts  upon 
wills  devising  property  situated  within  the  state, 
and  while  it  is  also  true  that  we  adopt  the  construc- 
tion of  its  own  statutes  by  the  state  courts,  a  ques- 
tion may  remain  whether  the  statute,  as  so  con- 
strued, imports  a  violation  of  any  of  the  rights  se- 
cured by  applicable  provision  of  the  Constitution  of 
the  United  States.  And  such  is  the  contention 
here. 

This  court  has  no  authority  to  revise  the  statutes 
of  New  York  upon  any  grounds  of  justice,  policy  or 
consistency  to  its  own  constitution.  Such  ques- 
tions are  concluded  by  the  decision  of  the  legislative 
and  judicial  authorities  of  the  State. 

In  Carpenter  v.  Pennsylvania,  17  How.  456,  the 
question  arose  as  to  the  validity,  in  its  Federal  as- 
pect, of  a  law  of  the  State  of  Pennsylvania  impos- 
ing an  inheritance  tax  on  personal  property  which 
had  passed  into  the  possession  of  an  executor  be- 
fore the  passage  of  the  Act,  and  which  was  held  by 
him  for  the  purpose  of  distribution  among  the  lega- 
tees, who  were  collateral  relatives  to  the  decedent 
The  act  was  held  valid  by  the  Supreme  Court  of  the 
State,  and  was  brought  up  to  this  Court  by  a  Writ 
of  Error  where  it  was  contended  that  such  an  act 
was  in  its  nature  an  ex  post  facto  law,  which  took 
the  property  of  an  individual  to  the  use  of  the  state, 
because  of  a  fact  which  had  occurred  prior  to  the 
passage  of  the  law,  and  also  that  the  law,  in  its  re- 
troactive effect,  impaired  the  obligation  of  a  con- 
tract, in  that  it  was  alleged  to  absolve  the  executor 
from  his  contract,  implied  in  law,  to  pay  over  the 
legacies  to  those  entitled  to  them,  just  to  the  extent 
that  the  law  required  him  to  pay  to  the  state.  The 
opinion  of  the  Court,  delivered  by  Mr.  Justice  Camp- 
bell, was  in  part  as  follows : 

*The  validity  of  the  Act,  as  affecting  succes- 
sions to  open  after  its  enactment,  is  not  contest- 
ed ;  nor  is  the  authority  of  the  State  to  levy  taxes 


223 

upon  personal  property  belonging  to  its  citizens, 
but  situated  beyond  its  limits,  denied.  Bnt  the 
complaint  is  that  the  application  of  the  Act  to  a 
succession  already  in  the  course  of  settlement,  and 
which  had  been  appropriated  by  the  last  will  of 
decedent,  involved  an  arbitrary  change  of  the  ex- 
isting laws  of  inheritance  to  the  extent  of  this  tax, 
in  the  sequestration  of  that  amount  for  the  uses 
of  the  State ;  that  the  rights  of  the  residuary  lega- 
tees were  vested  at  the  death  of  the  testator,  and 
from  that  time  those  persons  were  nonresidents 
and  the  property  taxed  was  also  beyond  the  State ; 
and  that  the  State  has  employed  its  power  over  the 
executor  and  the  property  within  its  borders,  to 
accomplish  a  measure  of  wrong  and  injustice ;  that 
the  act  contains  the  imposition  of  a  forfeiture  or 
penalty,  and  is  ex  post  facto. 

It  is,  in  some  sense,  true  that  the  rights  of  do- 
nees under  a  will  are  vested  at  the  death  of  the 
testator ;  and  that  the  acts  of  administration  which 
follow  are  conservatory  means,  directed  by  the 
State  to  ascertain  those  rights,  and  to  accomplish' 
an  effective  translation  of  the  dominion  of  the 
decedent  to  the  objects  of  his  bounty,  and  the  leg- 
islation adopted  with  any  other  aim  than  this 
would  justify  criticism,  and  perhaps  censure.  But, 
until  the  period  for  distribution  arrives,  the  law 
of  the  decedent's  domicile  attaches  to  the  prop- 
erty, and  all  other  jurisdictions  refer  to  the  place 
of  the  domicile  as  that  where  the  distribution 
should  be  made.  The  will  of  the  testator  is  proven 
there,  and  his  executor  receives  his  authority  to 
collect  the  property,  by  the  recognition  of  the 
legal  tribunals  of  that  place.  The  personal  es- 
tate, so  far  as  it  has  a  determinate  owner,  be- 
longs to  the  executor  thus  constituted.  The  rights 
of  the  donee  are  subordinate  to  the  conditions,  for- 
malities, and  administrative  control,  prescribed  by 
the  State  in  the  interests  of  its  public  order,  and 
are  only  irrevocably  established  upon  its  abdica- 
tion of  this  control  at  the  period  of  distribution. 
If  the  State,  during  this  period  of  administration 
and  control  by  its  tribunals  and  their  appointees. 


224 

think  fit  to  impose  a  tax  upon  the  property,  there 
is  no  obstacle  in  the  Constitution  and  laws  of  the 
United  States  to  prevent  it.  Ennis  v.  Smith,  14 
How.  400. 

The  Act  of  1860,  in  enlarging  the  operation  of 
the  Act  of  1826  and  by  extending  the  language  of 
that  Act  beyond  its  legal  import,  is  retrospective 
in  its  form;  but  its  practical  agency  is  to  subject 
to  assessment  property  liable  to  taxation,  to  an- 
swer an  existing  exigency  of  the  State,  and  to  be 
collected  in  the  course  of  future  administration; 
and  the  language  retrospective  is  of  no  impor- 
tance, except  to  describe  the  property  to  be  in- 
cluded in  the  assessment.  And  as  the  Supreme 
Court  of  Pennsylvania,  has  well  said,  *in  estab- 
lishing its  peculiar  interpretation,  it  (the  legisla- 
ture) has  only  done  indirectly  what  it  was  compe- 
tent to  do  directly.'  But  if  the  Act  of  1850  in- 
volved a  change  in  the  law  of  succession,  and 
could  be  regarded  as  a  civil  regulation  for  the  di- 
vision of  the  estates  of  unmarried  persons  having 
no  lineal  heirs,  and  not  as  a  fiscal  imposition,  this 
Court  could  not  pronounce  it  to  be  an  ex  post 
facto  law  within  the  tenth  section  of  the  nineteenth 
article  of  the  Constitution.  The  debates  in  the 
Federal  Convention  upon  the  Constitution  show 
that  the  terms  ^ex  post  facto  laws'  were  under- 
stood in  a  restricted  sense,  relating  to  criminal 
cases  only,  and  that  the  description  of  Blackstone 
of  such  laws  was  referred  to  for  their  meaning. 
(3  Mad.  Pap.  1399,  1450,  1579.)  This  significa- 
tion was  adopted  in  this  Court  shortly  after  its 
organization,  in  opinions  carefully  prepared,  and 
has  been  repeated  Iv  announced  since  that  time. 
{Caldver  v.  Bull,  3  Dall.  386;  Fletcher  v.  Peek,  6 
Cranch,  87;  8  Pet.  88;  11  Pet.  421.)'''  Orr  v. 
GiMm,  183  IT.  S.  278. 


225 

CHAPTER  XIII. 

Fees  and  Salaries. 


375.  Section  Twelve. 

376.  Clerk  of  the   County  Court — 

Fees. 

377.  Clerk  of  the  County  Court  of 

Cook  County. 


378.  May    Appoint   an   Inheritance 

Tax  Clerk. 

379.  Clerk   of  the   County  Court — 

Fees  When  the  People  Insti- 
tute the  Proceeding. 


375.  Section  Twelve.  The  fees  of  the  Clerk  of 
the  County  Court  in  inheritance  tax  mat- 
ters in  the  respective  counties  of  this 
state,  as  classified  in  the  Act  concerning 
fees  and  salaries,  shall  be  as  follows: 

In  counties  of  the  first  and  second  class, 
for  services  in  all  proceedings  in  each  es- 
tate before  the  County  Judge  the  Clerk 
shall  receive  a  fee  of  five  dollars.  In  all 
such  proceedings  in  counties  of  the  third 
class,  the  Clerk  shall  receive  a  fee  of  ten 
dollars.  Such  fees  shall  be  paid  by  the 
County  Treasurer,  on  the  certificate  of  the 
County  Judge,  out  of  any  money  in  his 
hands,  on  account  of  said  tax.  In  counties 
of  the  third  class,  the  Attorney-General 
of  the  state  may  appoint  an  attorney,  who 
shall  be  known  as  the  ^^Inheritance  Tax 
Attorney",  and  whose  salary  shall  be  not 
to  exceed  three  thousand  dollars  per  year, 
payable  monthly  out  of  the  State  Treas- 
ury upon  warrants  draivn  by  the  Auditor 
of  Public  Accounts,  on  vouchers  approved 
by  the  Attorney-General.  In  counties  of 
the  third  class,  the  Clerk  of  the  County 
Court  may  appoint  a  clerk  in  the  office  of 
the  Clerk  of  said  Court,  to  be  known  as  the 
^'Inheritance  Tax  Clerk",  whose  compen- 
sation shall  be  fixed  by  the  County  Judge, 
not  to  exceed  fifteen  hundred  dollars  per 
year,  and  not  to  exceed  the  fee  earned  in 
said  office  in  inheritance  tax  matters,  the 


226 

surplus  of  such  fees  over  said  compensa- 
tion so  fixed  to  be  turned  into  the  County 
Treasury.  In  addition  to  the  above,  the 
Clerk  of  the  County  Court  shall  be  entitled 
in  all  suits  brought  for  the  collection  of 
delinquent  inheritance  tax,  and  all  con- 
tested inheritance  tax  cases  appealed  from 
the  County  Judge  to  the  Supreme  Court, 
the  same  fees  as  are  noiv,  or  ivhich  may 
hereafter  be,  alloived  by  laiv  in  suits  at 
laiv,  or  in  the  matter  of  appeals  at  law,  to 
or  from  the  County  Court,  ivhich  fees  shall 
be  taxed  as  costs  and  paid  as  in  other  cases 
at  laxr;  and  in  all  cases  arising  under  this 
act,  including  certified  copies  of  documents, 
or  records  in  his  o£&ce,  for  ivhich  no  spe- 
cific fees  are  provided,  the  Clerk  of  the 
County  Court  shall  charge  against  and  col- 
lect from  the  person  applying  for,  or  en- 
titled to  such  services,  or  certified  copies, 
the  same  fees  as  are  noiv,  or  ivhich  may 
hereafter  be,  allowed  for  similar  services 
or  certified  copies  in  said  court,  and  for 
recording  inheritance  tax  receipts  re- 
quired to  be  recorded  in  his  office,  he  shall 
receive  the  same  fees  ivhich  noiv  are  or 
hereafter  may  be  allowed  by  law  to  the 
Recorder  of  Deeds  for  recording  similar 
instruments. 

376.     Clerk  of  the  County  Court — Fees. 

In  first  and  second  class  counties  the  Clerk  of  the  Coun- 
ty Court  is  allowed  $5.00  for  each  case  instituted  before 
the  County  Judge.  All  appraisements  are  instituted  be- 
fore the  County  Judge,  when  an  Appraiser  is  appointed 
on  petition  or  his  own  motion.  The  Clerk  is  entitled  to 
his  fee  out  of  any  inheritance  tax  moneys  in  the  hands  of 
the  County  Treasurer  on  the  certificate  of  the  County 
Judge.  It  will  be  noted  that  Clerk's  fees  are  not  con- 
fined to  the  particular  appraisement,  as  are  Appraiser's 


227 

fees.  In  suits  under  Sections  15  and  16  the  fees  are  the 
same  as  now  allowed  at  law  in  other  cases  and  should  be 
taxed  as  costs. 

In  appeals  from  the  County  Judge  to  County  Court  the 
fees  are  the  same  as  now  allowed  in  appeals  at  law,  and 
should  be  taxed  as  costs.  The  State,  however,  is  not 
chargeable  with  costs. 

377.  Clerk  of  the  County  Court  of  Cook  County. 

The  Clerk  of  the  County  Court  of  Cook  County,  a  third 
class  county,  is  entitled  to  withdraw,  on  certificate  of 
County  Judge,  from  any  moneys  in  the  hands  of  the 
County  Treasurer  on  account  of  Inheritance  Taxes  col- 
lected, the  sum  of  $10.00  for  each  appraisement  case. 

378.  May  Appoint  an  Inheritance  Tax  Clerk. 

The  Clerk  of  the  County  Court  (Cook  County)  may  ap- 
point one  inheritance  tax  clerk  to  work  in  his  office,  whose 
compensation  siall  be  fixed  by  the  County  Judge,  but 
said  salary  shall  not  exceed  $1,500.00  per  year,  and  if  the 
fees  earned  in  Inheritance  Tax  matters  are  less  than 
$1,500.00  per  year,  the  salary  of  the  Inheritance  Tax 
Clerk  shall  not  exceed  the  fees  earned. 

It  is  provided  by  the  law  that  the  fees  collected  in 
inheritance  tax  matters  by  the  Clerk  of  the  County  Court, 
after  paying  the  salary  of  the  Inheritance  Tax  Clerk 
shall  be  turned  into  the  County  Treasury. 

379.  Clerk  of  the  County  Court^Fees  When  the 

People  Institute  the  Proceeding. 

Opinion  by  the  Attorney  General  of  Illinois,  1908, 
page  264,  on  proposition  of  The  People  paying  costs,  it 
was  held: 

**A  justice  of  the  peace  cannot  recover  costs 
against  the  People.  Therefore  he  cannot  legally  de- 
mand the  payment  of  such  fees  in  advance. 


228 

In  5  Ency.  of  Pleading  &  Practice,  151,  the  princi- 
ple is  stated : 

*  At  common  law,  the  rule  was  that  the  king  should 
neither  pay  or  receive  costs,  as  the  former  was  con- 
sidered his  prerogative,  and  the  latter  beneath  his 
dignity;  and  the  general  terms  of  statutes  giving 
costs  did  not  include  the  sovereign.  The  same  prin- 
ciple has  been  applied  in  this  country  to  suits,  either 
civil  or  criminal,  in  which  the  Federal  or  State  gov- 
ernments, including  municipal  corporations  when 
acting  as  a  state  agency  are  parties;  and  thus  they 
are  liable  only  in  the  event  of  express  statutory  pro- 
vision, which,  however,  is  now  quite  general.' 

In  Sandherg  v.  State ,  113  Wis.  598;  TJ.  S,  v.  Baker, 
2  Wheat.  395;  U.  S,  v.  Ringold,  8  Peters,  150;  Stan- 
ley V.  Schwalhy,  162  U.  S.  255,  the  general  principle 
was  laid  down  as  follows : 

'Nonjudgment  for  costs  can  be  entered  against  the 
State  or  Government  without  statutory  authority 
therefor. ' 

The  statutes  of  Illinois  do  not  impose  costs  against 
the  People  of  the  State  in  any  case.  The  statutes 
authorize  the  entry  of  judgment  for  costs  in  favor 
of  the  People  in  certain  cases.  The  provision  of  the 
statute  upon  that  is  contained  in  Section  17,  Chapter 
33,  Hurd's  Eevised  Statutes,  1905. 

This  statute  has  been  construed  by  the  Supreme 
and  Appellate  Courts  of  this  State  under  varying 
circumstances.  In  People  v.  Pierce,  Q  HI.  553,  the 
Court  held,  that  the  State  is  not  obliged  to  give  any 
bond  for  costs  in  any  case.  Neither  does  it  pay  costs 
except  in  the  particular  way  pointed  out  by  the  stat- 
ute. 

In  the  case  of  the  Attorney  General  v.  Illinois  Ag- 
ricultural College,  85  111.  516,  the  Court  held,  it  was 
an  error  to  decree  that  the  State  shall  pay  costs  in  a 
suit  brought  in  its  behalf." 

But  should  the  State  be  successful  in  the  litigation 
costs  may  be  taxed  and  collected  from  the  defendants. 
(This  opinion  does  not  cover  the  fees  payable  to  the  Clerk 
in  inheritance  tax  appraisements.)  See  Attorney  Gen- 
eral Opinions,  post. 


229 


CHAPTER  XIV. 
Misconduct  of  Appkaisee. 

380.  Section  Thirteen.  Any  appraiser  appointed 
by  this  Act,  -wlko  shall  take  any  fee  or  re- 
-ixrard  from  any  executor,  administrator, 
trustee,  legatee,  next  of  kin  or  heir  of  any 
decedent,  or  from  any  other  person  liable 
to  pay  said  tax  or  any  portion  thereof, 
shall  be  guilty  of  a  misdemeanor,  and  upon 
conviction  in  any  court  having  juridic- 
tion  of  misdemeanors,  he  shall  be  fined  not 
less  than  two  hundred  and  fifty  dollars 
nor  more  than  five  hundred  dollars  and  im- 
prisoned not  exceeding  ninety  days;  and 
in  addition  thereto  the  County  Judge  shall 
dismiss  him  from  such  service. 


230 


CHAPTER  XV. 


Jurisdiction  of  County  Court. 


381.  Section  Fourteen. 

382.  County  Court — Jurisdiction. 

383.  County  Court  —  Jurisdiction  — 

County  Judge  Acts  as  As- 
sessor. 

384.  County  Judge  first  Taking  Ju- 

risdiction Appraises  all 
Property  Eegardless  of  its 
location. 

385.  County  Court — Has  Power  to 

issue  Commission  to  Take 
Deposition    in    Non-resident 


Estate  when  there  is  Ap- 
praisable  Property  within 
the   Court's  Jurisdiction. 

386.  County  Judge— County  Where- 

in Donee  of  Power  was  Dom- 
iciled Determines  Jurisdic- 
tion. 

387.  County  Judge  —  Jurisdiction — 

Non-resident. 

388.  The  Jurisdiction — Non-resident 

Decedent. 

389.  Surrogate  Court — will  Assume 

Constitutionality  of  Statute. 


381.  Section  Fourteen.     The  County  Court  in  the 

county  in  ixrliich  the  property  is  situated 
of  the  decedent,  jxrlio  -was  not  a  resident 
of  the  state  or  in  the  county  of  which  the 
deceased  ixras  a  resident  at  the  time  of  his 
death,  shall  have  jurisdiction  to  hear  and 
determine  all  questions  in  relation  to  the 
tax  arising  under  the  provisions  of  this 
Act,  and  the  County  Court  first  acquiring 
jurisdiction  hereunder  shall  retain  the 
same  to  the  exclusion  of  every  other. 

382.  County  Court— Jurisdiction. 

The  merits  of  a  suit  does  not  determine  jurisdiction, 
but  rather  the  fundamental  power  of  the  Court  to  enter- 
tain the  suit.    Dixon  v.  Russell,  73  Atl.  51. 


383.     County    Court— Jurisdiction-^Connty    Judge 
Acts  as  Assessor. 

The  County  Court  has  jurisdiction  to  hear  and  deter- 
mine all  questions  relating  to  the  tax.  A  special  sys- 
tem of  taxation  was  created  by  the  enactment  of  the  in- 
heritance tax  law  with  the  machinery  for  assessment. 


231 

The  County  Judge  acts  as  assessor  in  the  first  instance 
and  as  such  considers  all  questions  presented  by  the  Ap- 
praiser's report.  Re  Sholem,  238  111.  203 ;  People  v.  Mills, 
247  111.  620;  People  v.  Moir,  207  111.  180;  Re  Wolfe,  137 
N.  Y.  205. 

384.  County  Judge  First  Taking  Jurisdiction  Ap- 

praises All  Property  Regardless  of  Its  IjO- 
cation. 

An  appraiser  included  in  his  appraisement,  property 
situated  in  New  York  City,  and  also  property  situated  in 
Brooklyn,  two  different  counties.  On  a  contention  by 
the  executor  that  the  property  should  be  appraised  in  the 
separate  jurisdictions  the  surrogate  held :  that  the  sur- 
rogate of  any  county  first  acquiring  jurisdiction,  could 
appraise  all  property  of  decedent,  regardless  of  its  loca- 
tion. That  in  case  real  estate  was  situated  outside  of  the 
county  wherein  the  tax  appraisement  was  conducted,  that 
Section  23,  Laws  of  1885,  provided  for  the  issuance  of  a 
receipt  by  the  collecting  officer  in  the  county  where  the 
tax  was  paid,  which  receipt  may  be  filed  in  the  counties 
where  the  property  is  situate  and  thereby  evidence  pay- 
ment.   Matter  of  Keenan,  5  N.  Y.  S.  200. 

385.  County  Court — Has  Poiver  to  Issue  Commis- 

sion to  Take  Deposition  in  Nonresident 
Estate  When  There  Is  Appraisable  Prop- 
erty Within  the  Court's  Jurisdiction. 

In  an  appraisement  of  the  estate  of  a  nonresident  dece- 
dent the  facts  developed  that:  Decedent  prior  to  death 
and  in  contemplation  thereof,  sold  out  his  business  to  his 
partners,  the  price  realized  by  said  decedent  being  evi- 
denced by  a  check  payable  to  him  which  he  endorsed  and 
delivered  to  his  wife.     She  deposited  the  check  with  a 


232 

Trust  Company  in  New  York  and  the  same  was  there- 
upon transferred  to  said  Trust  Company.  Decedent  died 
intestate  and  at  the  time  of  his  death,  the  Trust  Company 
aforesaid  has  on  deposit,  approximately  $36,000.00  to 
the  credit  of  the  widow  of  decedent.  Held,  that  the  sur- 
rogate had  power  to  issue  a  commission  to  take  the  tes- 
timony of  a  nonresident  witness  relative  to  the  transac- 
tions through  which  the  widow  received  said  deposit  in 
order  that  the  surrogate  might  have  before  him  material 
evidence  as  to  the  taxability  of  said  deposit.  Matter  of 
Wallace,  71  App.  Div.  (N.  Y.)  284. 

386.  County   Judge — County   Wherein    Donee    of 

Power   ivas   Domiciled   Determines   Juris- 
diction. 

Decedent  died  in  1883,  a  resident  of  West  Chester 
County,  New  York,  and  by  his  will  bequeathed  his  widow 
a  life  interest  in  a  trust  fund  created  thereunder  with 
power  in  her  to  appoint  the  fund  at  death.  The  widow 
died  in  1899,  a  resident  of  Erie  County,  New  York,  ex- 
ercising the  power.  The  surrogate  of  West  Chester 
County  appointed  an  Appraiser,  who  taxed  the  fund  pass- 
ing by  the  power.  The  appointment  of  this  Appraiser 
was  subsequently  vacated  on  the  ground  that  the  surro- 
gate of  West  Chester  had  no  jurisdiction  to  make  the 
appointment,  but  that  the  surrogate  of  Erie  County, 
which  was  the  residence  of  the  donee  of  the  power  had 
jurisdiction.   Matter  of  Beaver,  63  App.  Div.  (N.  Y.)  283. 

387.  County  Judge — Jurisdiction — Nonresident. 

William  Hubbard  died  a  resident  of  Connecticut  leav- 
ing property  within  the  State  of  New  York.  No  admin- 
istration was  had  in  New  York,  but  probate  proceedings 
were  initiated  and  closed  in  Connecticut  and  the  execu- 


233 

tor  discharged  without  payment  of  inheritance  tax  on 
property  in  New  York.  Held,  that  such  discharge  did 
not  prevent  the  surrogate  of  New  York  taking  jurisdic- 
tion on  a  petition  for  an  appraisement  by  the  State 
Comptroller.  Matter  of  Euhhard,  21  Misc.  Rep.  (N.  Y.) 
566. 

388.  The  Jurisdiction — ^Nonresident  Decedent. 

Decedent  died  a  resident  of  New  Jersey,  while  the 
New  York  law  of  1885-1887  was  in  force,  owning  stock 
in  corporations  organized  under  the  laws  of  the  State  of 
New  York  and  deposits  in  a  New  York  bank.  Shortly 
after  the  death,  this  property  was  removed  and  trans- 
ferred to  the  place  of  domiciliary  administration.  Held, 
that  the  surrogate  court  had  no  jurisdiction  to  appoint 
an  Appraiser  to  assess  a  tax.  Matter  of  Embury,  19  App. 
Div.  (N.  Y.)  214.    (See  Beers  v.  Glynn,  211  U.  S.  477.) 

389.  Surrogate     Conrt^ — Will    Assnnie     Constitn- 

tionality  of  Statute. 

When  a  law  has  not  been  declared  unconstitutional  by 
a  Court  of  Eeview,  the  Surrogate  Court  will  assume  the 
law  is  constitutional.    Re  Porter,  124  N.  Y.  S.  676. 


234 


CHAPTER  XVI. 


Collection  of  Delinquent  Tax. 


390.  Section  Fifteen. 

391.  Section  Sixteen. 

392.  Enforcement    of    Collection — 

Contempt  —  Executors    and 
Administrators. 

393.  County     Court — Can     Enforce 

Payment  by  Contempt. 


394.  Delinquents  Cannot  Object  to 

Correctness  of  Assessment. 

395.  Executor — Liability  Cannot  be 

Determined  Under  Section 
Sixteen,  Laws  of  1885  (N. 
Y.). 


390.  Section  Fifteen.  If  it  shall  appear  to  the 
County  Court  that  any  tax  accruing  un- 
der this  act  has  not  been  paid  according  to 
laiv,  it  shall  issue  a  summons  summoning 
the  persons  interested  in  the  property  lia- 
ble to  the  tax  to  appear  before  the  court 
on  a  day  certain,  not  more  than  three 
months  after  the  date  of  such  summons,  to 
show  cause  why  said  tax  should  not  be 
paid.  The  process,  practice  and  pleadings, 
and  the  hearing  and  determination  there- 
of, and  the  judgment  in  said  court  in  such 
cases  shall  be  the  same  as  those  now  pro- 
vided, or  which  may  hereafter  be  provided 
in  probate  cases  in  the  County  Courts  in 
this  state,  and  the  fees  and  costs  in  such 
cases  shall  be  the  same  as  in  probate  cases 
in  the  County  Courts  of  this  state. 


391.  Section  Sixteen.  Whenever  it  appears  that 
any  tax  is  due  and  unpaid  under  this  act, 
and  the  persons,  institutions  or  corpora- 
tions liable  for  said  tax  have  refused  or 
neglected  to  pay  the  same,  it  shall  be  the 
duty  of  the  State's  Attorney,  in  counties 
of  the  first  and  second  class,  and  the  In- 
heritance Tax  Attorney,  in  counties  of  the 
third  class,  if  he  has  proper  cause  to  be- 
lieve a  tax  is  due  and  unpaid,  to  prosecute 
the  collection  of  same  in  the  County  Court 


235 

in  tlie  proper  county,  in  the  manner  pro- 
vided in  Section  Fifteen  of  this  act,  for  the 
enforcement  and  collection  of  such  tax; 
and  in  every  such  case  said  court  shall  al- 
low as  costs  in  said  case,  such  fees  to  said 
Attorney  as  the  court  may  deem  reason- 
able. 

392.     Enforcement  of  Collection^ — Contempt — Exe- 
cutors and  Administrators. 

On  March  8th,  1887,  the  surrogate  in  an  inheritance 
tax  appraisement,  fixed  a  tax  under  the  laws  in  force 
1885.  The  administrators  did  not  pay  the  tax  assessed 
and  on  March  5th,  1888,  the  District  Attorney  on  behalf 
of  the  Comptroller,  secured  the  issuance  of  a  citation  to 
all  the  persons  assessed  and  liable  to  pay  the  tax,  as  well 
as  to  the  administrators,  citing  all  to  show  cause  why  the 
tax  should  not  be  paid.  One  of  the  questions  presented 
was  whether  the  surrogate  should  order  the  administra- 
tors or  other  persons  liable  for  the  tax  to  make  payment, 
and  upon  their  refusal  to  obey  the  order,  to  enforce  obe- 
dience by  contempt  poceedings.  The  Court  held :  **  There 
can  be  no  doubt  that  under  a  statute  imposing  a  duty 
upon  the  surrogate  to  assess  and  fix  a  tax,  that  it  also 
gives  him  the  power  to  enforce  its  payment  by  such  pro- 
ceedings as  are  provided  for  the  enforcement  of  decrees 
of  his  Court.  In  regard  to  persons  interested  in  the 
property,  the  surrogate  can,  on  the  return  of  an  execu- 
tion, issued  upon  his  decree,  enforce  the  payment  (estate 
of  Gilman,  6  Dem.  Sur.  358).  The  administrators  also 
should  be  included  in  the  order  to  pay  the  Comptroller 
at  a  time  to  be  fixed,  the  tax  as  assessed  in  the  appraise- 
ment of  March  8th,  1887.  No  attachment  can  issue  for 
contempt  against  the  beneficiaries  until  execution  is  re- 
turned, but  as  to  the  administrators,  executors  and  trus- 


236 

tees,  application  for  attachment  can  be  made  without 
leave.  Be  Prout,  3  N.  Y.  S.  831;  Re  Vanderhilt,  10  N.  Y. 
S.  239. 

393.  County    Conrt— Can    Enforce    Payment    by 

Contempt. 

The  Surrogate  Court  may  enforce  its  order  to  pay  a 
tax  by  attachment.    Pelton's  estate,  10  N.  Y.  S.  643. 

394.  Delinquents  Cannot  Object  to  Correctness  of 

Assessment. 

In  a  suit  to  collect  a  tax  already  assessed,  the  correct- 
ness of  assessment  cannot  be  questioned.  The  correct- 
ness of  an  assessment  is  reviewable  only  in  the  statutory 
method,  viz.:  by  appeal.  Matter  of  Hackett,  14  Misc. 
Rep.  (N.  Y.)  282. 

395.  Executor — Liability  Cannot  Be  Determined 

Under     Section     Sixteen,     Laws     of     1885 
(N.  Y.). 

The  County  Judge  is  a  taxing  officer.  He  cannot  en-- 
tertain  a  motion  or  petition,  the  object  of  which  is  to  de- 
termine the  liability  of  an  executor.  Matter  of  Farley ^ 
15  N.  Y.  St.  Rep.  727. 


237 


CHAPTEE  XVn. 

Information  to  County  Teeasubee. 

396.  Section  Seventeen.  The  connty  judge  and 
county  clerk  of  each  county  shall,  evexry 
three  months,  make  a  statement  in  ivrit- 
ing  to  the  County  Treasurer  of  the  county 
of  the  property  from  ivhich,  or  the  party 
from  ivhom  he  has  reason  to  believe  a  tax 
under  this  act  is  due  and  unpaid. 


238 

CHAPTER  XVIII. 

Expense  fob  Sekvice  of  Summons. 

397.  Section  Eighteen.  .  398.  Sheriff— Cannot  be  Eeimbursed 

I  by  State  Treasurer. 

397.  Section    Eighteen.       Wlienever    the    county 

judge  of  any  county  shall  certify  that 
there  was  probable  cause  for  issuing  a 
summons  and  taking  the  proceedings  speci- 
fied in  Sections  Fifteen  and  Sixteen  of  this 
act,  the  State  Treasurer  shall  pay  or  allow 
to  the  treasury  of  any  county  all  expenses 
incurred  for  service  of  summons  and  his 
other  lawful  disbursements  that  has  not 
otherwise  been  paid. 

398.  SherifiB— Cannot    Be    Reimbursed    by    State 

Treasurer. 

The  Attorney  General  of  Illinois  has  held,  with  refer- 
ence to  this  section : 

**The  word  ^costs'  in  the  proper  and  generic  sense 
of  the  term  does  not  mean  expenses  and  costs  are 
not  required  to  be  advanced  by  the  People,  nor  can 
costs  be  recovered  against  the  People.  (Attorney 
Generars  Eeport,  1908,  p.  264,  opinion  rendered  No- 
vember 8th,  1906,  to  the  State's  Attorney  of  Clinton 
County,  Illinois.)  It  follows  therefore,  if  costs  can- 
not be  taxed  against  the  People,  the  sheriff  cannot 
demand  the  payment  of  his  costs  in  advance.  It  fol- 
lows further  that  if  costs  cannot  be  taxed  against 
the  People  the  sheriff  cannot  be  reimbursed  from 
the  State  Treasury  for  costs  in  serving  summons,  un- 
less Section  18  of  the  Inheritance  Tax  Act  of  1909 
is  broad  enough  to  authorize  such  charge.  Section 
18  provides  as  follows : 

*  Whenever  the  County  Judge  of  any  County 
shall  certify  that  there  was  probable  cause  for  is- 
suing a  summons  and  taking  the  proceedings  speci- 


239 

fied  in  Sections  15  and  16  of  this  Act,  the  State 

Treasurer  shall  pay  or  allow  to  the  treasury  of 

any  county  all  expenses  incurred  for  service  of 

summons  and  his  other  lawful  disbursements  that 

has  not  otherwise  been  paid.' 

In  Section  18,  therefore,  provision  is  made  for  the 

payment  to  the  County  Treasurer  of  *  expenses'  and 

*  disbursements.'    I  do  not  understand  that  in  any 

proper  case  the  word  *  expenses'  may  include  costs. 

The  word  *  expenses'  means  expenditure,  outlay 

or  disbursement  of  money,  12  Am.  &  Eng.  Ency.  of 

Law,  2nd  Ed.  394. 

I  think  the  word  *  expenses'  as  used  in  Section  18 
is  used  in  its  broad  and  general  sense  and  means  the 
reimbursement  for  any  actual  outlay  that  may  have 
been  incurred  by  the  County  Treasurer.  In  the  ab- 
sence, however,  of  any  specific  directions  that  the 
costs  of  an  officer  of  the  State  shall  constitute  a  part 
of  such  expenses,  and  in  view  of  the  general  princi- 
ple that  costs  cannot  be  taxed  against  the  State  it  is 
my  opinion  that  it  is  the  duty  of  the  sheriff  to  serve 
the  summons  without  the  advancement  of  any  fee 
therefor  by  the  State.  However,  if  the  State  should 
be  successful  in  the  litigation,  the  costs  of  the  pro- 
ceedings would  be  taxed  against  the  defendants.  Such 
costs  would  properly  include  the  fees  of  the  sheriff 
for  serving  summons."  Attorney  General  Reports 
1910. 


240 


CHAPTER  XIX. 

Record  Kept  by  County  Judge. 

399.  Section  Nineteen.  The  Treasurer  of  the 
state  shall  furnish  to  each  county  judge  a 
book,  in  which  he  shall  enter  the  returns 
made  by  appraisers,  the  case  value  of  an- 
nuities, life  estates  and  terms  of  years  and 
other  property  fixed  by  him,  and  the  tax 
assessed  thereon  and  the  amounts  of  any 
receipts  for  payments  thereof  filed  ivith 
him,  ivhich  boohs  shall  be  kept  in  the  of- 
fice of  the  county  judge  as  a  public  rec- 
ord. 


241 


CHAPTER  XX. 


County  Treasubee. 


400.  Section  Twenty. 

401.  County  Treasurer  Must  Eemit 

all  Inheritance  Tax  Collec- 
tions to  State  Treasurer 
within  Eeasonable  Time. 


401a.  Eemittance  can  be  enforced 
by  Mandamus. 

401b.  Illinois  Supreme  Court  has  de- 
termined when  remittance 
shall  be  made. 


400.  Section    Twenty.      The    Treasurer    of    each 

county  shall  collect  and  pay  to  the  State 
Treasurer  all  taxes  that  may  be  due  and 
payable  under  this  act,  who  shall  give  him 
a  receipt  therefor,  of  which  collection  and 
payment  he  shall  make  a  report  under  oath 
to  the  auditor  of  public  accounts,  on  the 
first  Monday  in  March  and  September  of 
each  year,  stating  for  what  estate  paid, 
and  in  such  form  and  containing  such  par- 
ticulars as  the  auditor  may  prescribe;  and 
for  all  said  taxes  collected  by  him  and  not 
paid  to  the  State  Treasurer  by  the  first  day 
of  October  and  April  of  each  year,  he  shall 
pay  interest  at  the  rate  of  ten  per  cent, 
per  annum. 

401.  County  Treasurer   Must  Remit  All  Inheri- 

tance Tax  Collections  to  State  Treasurer 
Within  Reasonable  Time. 

There  is  no  right  in  the  County  Treasurer  to  retain 
moneys  a  greater  length  of  time  than  is  reasonably  re- 
quired for  its  transmission  to  the  State  Treasurer.  Peo- 
pie  V.  Raymond,  188  111.  454. 


401a.     Remittance  Can  Be  Enforced  by  Mandamus. 

A  petition  for  mandamus  by  J.  S.  McCullough,  State 
Auditor,  against  Samuel  B.  Raymond,  as  County  Treas- 
urer of  Cook  County  to  compel  Raymond  to  turn  over 


242 

$68,470.30  collected  as  inheritance  taxes  to  the   State 

Treasurer.    The  petition  alleged  that  the  time  specified 

for  the  County  Treasurer  to  report  to  the  State  Auditor, 

viz. :    The  first  Monday  of  March  and  September  of  each 

year,  does  not  ^x  the  time  when  remittances  shall  be 

made  to  the  State  Treasurer,  but  that  all  remittances  of 

inheritance  tax  collections  should  be  made  by  the  County 

Treasurer  immediately  on  their  receipt  by  him  or  within 

a  reasonable  time  thereafter.    The  Court  held : 

401&.  *' By  the  provisions  of  Section  6,  executors, 
administrators  or  trustees  are  required  to  take  du- 
plicate receipts  from  the  County  Treasurer  for 
money  paid  under  the  provisions  of  the  act,  one  of 
which  receipts  is  required  to  be  forwarded  to  the 
State  Treasurer,  who  is  required  to  charge  the  Coun- 
ty Treasurer  with  the  amount  in  the  receipt  men- 
tioned. This  duty  on  the  part  of  the  executor,  ad- 
ministrator or  trustee  to  report  to  the  State  Treas- 
urer and  to  send  the  duplicate  receipt  must  be  done 
within  thirty  days  after  the  payment  of  the  money  to 
him.  The  charge  against  the  County  Treasurer  is 
made  at  once  by  the  State  Treasurer.  Section  12 
(Act  of  1895)  provides  that  the  County  Treasurer 
shall  collect  and  pay  to  the  State  Treasurer  all  taxes 
that  may  be  due  and  payable  under  the  Act,  and  the 
State  Treasurer  is  required  to  give  him  a  receipt 
therefor.  No  right  or  interest  exists  in  the  County 
Treasurer  to  the  money  so  collected  save  and  except 
the  commissions  allowed  by  law,  so  that  the  right 
to  retain  the  money  does  not  exist  in  the  County 
Treasurer,  but  it  is  his  duty  to  see  that  it,  with  rea- 
sonable expedition,  reaches  the  official  to  whom  it  is 
to  be  finally  paid.  No  check  on  the  State  Treasurer 
exists  by  reason  of  such  payment  by  the  County 
Treasurer  in  any  of  the  offices  of  the  State,  but  it  is 
provided  in  Section  19  that  the  County  Treasurer 
shall  make  a  report,  under  oath,  to  the  Auditor  of 
Public  Accounts  on  the  first  Mondays  of  March  and 
September  of  each  year,  of  the  collection  and  pay- 
ments of  such  moneys  as  may  be  made  under  the  Act. 


243 

This  sworn  report  provided  to  be  filed  with  the  Au- 
ditor of  Public  Accounts  is  a  check  which  is  made 
on  the  County  Treasurer  to  enable  the  auditor  to 
properly  keep  the  accounts  of  the  State.  The  time 
at  which  the  affidavit  with  reference  to  the  collection 
and  payment  of  moneys  provided  to  be  collected  un- 
der this  Act  is  to  be  filed  with  said  auditor  is  not  a 
limitation  and  has  no  bearing  on  the  question  as  to 
the  time  during  which  the  money  so  collected  can 
be  retained  by  the  County  Treasurer.  Having  no  in- 
terest in  the  funds  so  collected  save  his  commissions, 
and  owing  the  duty  of  seeing  that  the  money  shall 
reach  the  proper  and  official  custodian  with  reason- 
able expedition,  there  is  no  right  in  the  County 
Treasurer  to  retain  moneys  a  greater  length  of  time 
than  is  reasonably  required  for  its  transmission  to 
the  State  Treasurer.''  People  v.  Raymond,  188  111. 
454. 


244 

CHAPTER  XXI, 

Fees  of  County  Teeasurer — Duplicate  Tax  Receipts. 

402.  Section  Twenty-one.  I  404.  Who  entitled  to  Eeceipt-Filing 

403.  Section  Twenty-two.  I  in  different  counties. 

402.  Section  Twenty-one.    The  Treasurer  of  each 

county  shall  be  allowed  to  retain  two  per 
cent,  on  all  taxes  paid  and  accounted  for 
by  him  under  this  act  in  full  for  his  serv- 
ices in  collecting  and  paying  the  same,  in 
addition  to  his  salary  or  fees  now  allowed 
by  law. 

403.  Section  Twenty-two.     Any  person    or    body 

politic  or  corporate  shall,  upon  the  pay- 
ment of  the  sum  of  fifty  cents,  be  entitled 
to  a  receipt  from  the  County  Treasurer 
of  any  county  or  the  copy  of  the  receipt 
at  his  option  that  may  have  been  given  by 
said  Treasurer  for  the  payment  of  any  tax 
under  this  act,  to  be  sealed  with  the  seal 
of  his  office,  w^hich  receipt  shall  designate 
on  what  real  property,  if  any,  of  which  any 
deceased  may  have  died  seized,  said  tax 
has  been  paid  and  by  whom,  and  whether 
or  not  it  is  in  full  of  said  tax;  and  said  re- 
ceipt may  be  recorded  in  the  clerk's  office 
of  said  county  in  which  the  property  may 
be  situated,  in  a  book  to  be  kept  by  said 
clerk  for  such  purpose. 

404.  Who  Entitled  to  Receipt^Filing  in  Differ- 

ent Counties. 

Any  person  or  body  politic  is  entitled  to  a  copy  of  an 
inheritance  tax  receipt.  The  apparent  object  of  this  Sec- 
tion is  to  afford  any  person  or  body  politic  an  opportu- 
nity of  obtaining  evidence  of  payment  of  tax  on  prop- 
erty in  which  they  are  interested  or  in  which  they  may 


245 

desire  to  acquire  an  interest  in;  and  further  to  furnisli 
executors,  trustees,  heirs  and  devisees  the  written  evi- 
dence of  payment  of  tax  by  filing  for  record  in  the  office 
of  the  County  Clerk  of  the  county  wherein  the  real  estate 
is  situate  a  duplicate  receipt,  thereby  affecting  a  public 
record  of  the  payment. 

An  illustration  of  the  operation  of  this  section  would 
be  in  the  case  of  a  decedent  leaving  real  estate.  The  ap- 
praisement would  be  had  in  the  county  first  acquiring 
jurisdiction  and  on  payment  of  the  tax  in  that  county, 
filing  copies  of  the  receipt,  showing  payment,  in  all  the 
counties  in  which  the  real  property  is  situate  which  would 
effect  a  record  of  payment.  Copies  of  receipts  can  be 
obtained  from  the  County  Treasurer  of  the  county  where- 
in the  appraisment  was  had  and  filed  in  all  the  counties 
wherein  the  property  is  located.  (See  Keenan's  Estate,  5 
N.  Y.  S.  200.) 


246 


CHAPTER  XXII. 


Settling  Q'uestion  of  Taxability  and  Lien — Statute  of 

Limitations. 


405.  Section  Twenty-three. 
405a.  Section  Twenty-four. 

406.  Lien    of    Tax — ^When    Tax    is 

Postponed  lien  Continues  un- 
til Lifted  by  Payment — Tax 
is  on  Succession. 

407.  When  Tax  is  '<Due  and  Legal- 

ly Demandable. ' ' 

408.  Tax  a  Prior  Lien  to  Mortgage. 


409.  When    State    Estopped    from 

Collection. 

410.  Liability    of    Heir    or    Benefi- 

ciary not  Believed — Lien 
Lifted  from  Eeal  Estate. 

411.  Executors,  Administrators, 

Trustees  or  Beneficiaries  not 
Believed  by  Statute  of  Lim- 
itations. 

412.  When  the  Statute  is  a  Bar  to 

Assessment. 


405.  Section  Twenty-three.  When  any  person  in- 
terested in  any  property  in  this  state, 
which  shall  have  been  transferred  within 
the  meaning  of  this  act,  shall  deem  the 
same  not  subject  to  any  tax  under  this  act, 
he  may  file  his  petition  in  the  County 
Court  of  the  proper  county  to  determine 
whether  said  property  is  subject  to  the  tax 
herein  provided,  in  which  petition  the 
County  Treasurer  and  all  persons  known 
to  have  or  claim  any  interest  in  said  prop- 
erty shall  be  made  parties.  The  County 
Court  may  hear  the  said  cause  upon  the  re- 
lation of  the  parties  and  the  testimony  of 
witnesses,  and  evidences  produced  in  open 
court,  and,  if  the  court  shall  find  said 
property  is  not  subject  to  any  tax,  as  here- 
in provided,  the  court  shall,  by  order,  so 
determine:  but  if  it  shall  appear  that  said 
property,  or  any  part  thereof,  is  subject 
to  any  such  tax,  the  same  shall  be  ap- 
praised and  taxed  as  in  other  cases.  An 
adjudication  by  the  County  Court,  as  here- 
in provided,  shall  be  conclusive  as  to  the 
lien  of  the  tax  herein  provided  upon  said 
property,  subject  to  appeal  to  the  Supreme 


247 

Court  of  the  state  by  the  County  Treasurer, 
or  Attorney  General  of  the  state,  in  be- 
half of  the  people,  or  by  any  party  having 
an  interest  in  said  property.  The  fees  and 
costs  in  all  cases  arising  under  this  section 
shall  be  the  same  as  are  noxir  or  may  here- 
after be  allovred  by  laiv  in  cases  at  la-w  in 
the  County  Court. 

(See  Practice  and  Procedure.) 

405a.  Section  Twenty-four.  The  lien  of  the  col- 
lateral inheritance  tax  shall  continue  un- 
til the  said  tax  is  settled  and  satisfied: 
Provided,  that  said  lien  shall  be  limited  to 
the  property  chargeable  therewith:  And, 
provided,  further,  that  all  inheritance 
taxes  shall  be  sued  for  within  five  years 
after  they  are  due  and  legally  demandable, 
otherw^ise  they  shall  be  presumed  to  be 
paid  and  cease  to  be  a  lien  as  against  any 
purchaser  of  real  estate. 

406.  Lien  of  Tax— When  Tax  Is  Postponed  Lien 

Continues  Until  Lifted  by  Payment — Tax 
Is  on  Succession. 

'*It  is  to  be  borne  in  mind  that  the  tax  is  levied  on  the 
succession  and  not  on  the  property  as  such,  and  the  rate 
and  exemptions  must  be  determined  by  the  succession; 
and  it  would  seem  to  follow  necessarily  that  when  the 
basis  of  the  tax  cannot  be  fixed,  the  tax  itself  cannot  be 
fixed.  It  is,  however,  made  a  lien  on  the  property  which 
will  continue  until  the  uncertainties  change  to  certain- 
ties, as  they  will  in  time,  when  it  may  be  collected. ' '  Bill- 
ings V.  People,  189  111.  472-486. 

407.  "When  Tax  Is  *'Due    and    Legally    Demand- 

able." 

By  Section  3  all  taxes  are  ''due  and  payable  at  the 


248 

death  of  decedent''.    In  re  Estate  of  Graves,  242  111.  212 

(216),  the  Court  said: 

*'The  Inheritance  Tax  Law  provides  that  all  prop- 
erty so  descending,  whether  under  the  statute  of 
wills  or  the  statute  of  descent,  shcJl  be  subject  to  tax 
at  certain  specified  rates,  at  the  fair  market  value 
thereof,  which  shall  be  due  at  the  date  of  the  death 
of  decedent''. 

408.  Tax  a  Prior  Lien  to  Mortgage. 

' '  The  lien  for  taxes  imposed  upon  the  personal  property 
takes  precedence  of  a  prior  mortgage  on  such  property, 
although  the  statute  does  not  in  terms  declare  that  the 
lien  for  taxes  shall  be  paramount.  {Minnesota  v.  Central 
Trust  Co,,  94  Fed.  Rep.  244;  36  C.  0.  A.  214.) "  Greene's 
Law  of  Taxable  Transfers,  2nd  Ed.  142. 

409.  When  State  Estopped  from  Collection. 

When  no  proceeding  is  instituted  by  the  State  until 
forty-two  years  after  the  transfer,  the  State  is  estopped 
from  proceeding  with  appraisement  and  collection  of  tax. 
Stewart's  Estate,  147  Pa,.  383. 

410.  Liability  of  Heir  or  Beneficiary  Not  Relieved 

— ^Lien  Lifted  from  Real  Estate. 

Only  the  lien  on  the  real  estate  is  lifted,  the  personal 
liability  of  beneficiary  is  not  relieved  in  Pennsylvania  un- 
der a  statute  which  reads  the  same  as  Section  24,  Laws 
Illinois  1909.    In  re  Cullen,  142  Pa.  18,  the  Court  said: 

*' Peter  Cullen  died  a  resident  of  Pennsylvania^ 
September  5th,  1881,  leaving  a  will  whereby  he  be- 
queathed his  entire  estate  to  Annie  E.  Costello.  The 
will  was  contested.  Letters  pendente  lite  were 
granted  to  the  Guaranty  Trust  Company  in  October, 
1881.  A  will  contest  was  compromised  by  the  par- 
ties in  interest  on  July  3rd,  1889,  and  the  will  was  ad« 


249 

mitted  in  probate  and  letters  of  administration 
granted  to  the  Guaranty  Trnst  Company.  On  July 
5tli,  1889,  the  Registrar  of  Wills  caused  an  appraise- 
ment to  be  made  of  the  estate  of  the  testator  for  the 
assessmect  of  a  Collateral  Inheritance  Tax.  There- 
upon the  administrator  and  Annie  E.  Costello,  lega- 
tee, appealed  to  the  Orphan's  Conrt  from  the  ap- 
praisement, filing  exceptions,  the  first  of  which  ex- 
ceptions specify:  ^Hhat  the  Appraiser  erred  in  as- 
sessing the  tax  against  the  estate,  no  suit  having 
been  brought  by  the  commonwealth  of  Pennsylvania 
within  ^ve  years  from  September  5th,  1881  (the  date 
of  the  death  of  testator)  for  the  amount  of  said  tax 
as  required  by  the  Act  of  assembly  in  that  case  made 
and  provided,  to-wit:  Section  20  of  the  Act  of  May 
6th,  1887,  whereby  said  estate  is  relieved  from  pres- 
ent liability  for  said  tax." 

The  Orphan's  Court  by  Justice  Ashman  in  deciding 

this  case,  said: 

**The  main  question  submitted  in  this  appeal  is 
whether  the  commonwealth  is  now  barred  from  col- 
lecting the  Collateral  Inheritance  Tax  by  reason  of 
the  lapse  of  more  than  ^ve  years  from  the  death  of 
the  decedent.  Cullen  died  in  September,  1881.  The 
will  was  admitted  to  probate  in  1889.  On  July  15th, 
1889,  an  Inheritance  Tax  appraisal  was  made".  Re- 
ferring to  Section  20  of  the  Act  of  1887,  he  con- 
tinued— ^*This  Section  is  the  only  one  in  the  Act 
which  restricts  the  right  of  the  commonwealth  to 
sue.  As  a  matter  of  first  impressions  and  without 
aid  from  the  light  which  preceding  litigation  might 
cast  on  its  meaning,  it  would  seem  that  it  was  in- 
tended to  quiet  the  title  of  purchasers  of  real  estate, 
by  declaring  that  as  to  them  the  tax  shall  be  pre- 
sumed to  be  paid  and  should  lose  its  lien,  if  suit  for 
its  recovery  were  not  begun  within  the  statutory 
period.  This  act  does  not  imply — and  it  certainly 
does  not  affirm — that  the  personal  liability  shall  not 
continue.  On  the  contrary,  even  the  lien  is  dis- 
charged only  when  the  land  has  been  sold.  If  there 
is  no  purchaser  to  protect,  both  the  lien  and  the  debt 


250 

remain.  In  any  other  sense  than  this,  the  clause  as 
to  purchasers  is  meaningless;  for,  if  the  lien  is 
gone,  in  all  cases  after  ^Ye  years,  why  did  the  Legis- 
tature  say  that  it  shall  cease  as  against  themV^ 

411.  Executors,  Administrators ^  Trustees  or  Bene- 
ficiaries Not  Relieved  by  Statute  of  liimi- 
tations. 

Abram  R.  Strang  died  a  resident  of  New  York  in  Janu- 
ary, 1888,  transferring  real  estate  of  the  aggregate  value 
of  $21,000.00'  by  his  will.  No  proceeding  was  instituted 
by  the  State  until  the  expiration  of  six  years  from  the 
death  when  an  appraisement  was  had  and  a  tax  fixed 
under  the  Laws  of  1885,  as  amended  in  1887.  An  appeal 
was  taken  on  the  ground  that  subdivision  2,  Sec.  382, 
Code  of  Civil  Procedure,  fixed  a  limitation  of  six  years 
upon  an  action  to  recover  upon  a  liability  created  by 
statute.  The  Court  held :  It  is  properly  urged  that  the 
appraisement  was  to  assess  and  determine  the  amount  of 
the  tax,  and  is  not  an  action  to  recover  *^upon  a  liability 
created  by  statute".  That  the  statute  goes  merely  to  the 
remedy ;  but  it  may  be  assumed  that  the  appraisement  is 
a  preliminary  step  in  a  proceeding  to  collect  a  tax.  That 
if  the  remedy  is  barred,  the  preliminary  proceedings  fall 
with  it.  That  the  Legislature  intended  Chapter  737, 
Laws  1899,  providing  for  the  bar  to  be  retroactive,  but 
that  so  far  as  beneficiaries  and  devisees  were  concerned 
the  liability  was  not  lifted.  This  statute  was  intended 
to  lift  the  lien  only  from  property  purchased  by  innocent 
buyers  for  value  and  can  give  no  rights  or  exemptions  to 
executors,  administrators,  trustees  or  beneficiaries.  It 
was  insisted,  however,  that  to  reopen  a  matter  which  had 
been  judicially  determined  after  the  bar  of  the  statute 
had  run,  would  be  unjust ;  that  it  would  be  inequitable  to 
compel  executors  to  make  good  deficiences  **but  the  an- 


251 

swer  to  this  is  simple:  executors,  administrators  and 
trustees  are  presumed,  like  other  people,  to  know  the 
law,  and  they  have  no  right  to  permit  the  property  on 
which  the  State  has  a  lien  to  pass  out  of  their  possession 
or  control,  until  that  lien  has  been  discharged.  The 
property  comes  into  their  possession  subject  to  this  lien. 
It  is  made  their  duty  to  call  the  attention  of  the  public 
officials  to  the  fact  that  they  have  an  estate  in  their  pos- 
session and  that  it  is  subject  to  the  tax,  and  until  this 
duty  is  discharged  and  the  State  has  been  paid  this  tax, 
there  is  no  one  who  can  give  a  good  title  to  the  property, 
and  this  much  of  the  law  is  known  to  the  beneficiaries 
and  to  all  persons  interested  so  that  there  can  be  no  such 
thing  as  a  vested  interest  in  the  estate,  no  matter  how 
completely  it  may  have  been  distributed*'.  Matter  of 
Strang,  117  App.  Div.  (N.  Y.)  796-799. 

412.     When  the  Statute  Is  a  Bar  to  Assessment. 

In  an  action  brought  in  the  County  Court  of  Hawkins 
County,  Tennessee,  to  recover  an  inheritance  tax,  on 
appeal  from  the  Order  Fixing  Tax,  the  question  arose 
whether  Section  19  of  the  Inheritance  Tax  Law  (1893) 
was  a  complete  bar  to  the  State  from  a  recovery  of  the 
tax,  the  death  of  the  decedent  out  of  whose  estate  the 
tax  arose  having  occurred  more  than  five  years  prior  to 
date  of  the  commencement  of  said  proceeding.  Said  Sec- 
tion 19,  reads  as  follows: 

*^The  lien  of  the  Collateral  Inheritance  (tax)  shall 
continue  until  the  tax  is  settled  and  satisfied;  pro- 
vided that  the  said  lien  shall  be  limited  to  the  prop- 
erty chargeable  therewith;  and  provided  further 
that  all  Collateral  Inheritance  Tax(es)  shall  be  sued 
for  within  five  years  after  they  are  due  and  legally 
demandable,  otherwise  they  shall  be  presumed  to 
have  been  paid  and  cease  to  be  a  lien  as  against  any 
purchasers  of  real  estate". 


252 

The  Court  held: 

**It  is  insisted  for  the  State  that  the  last  clause 
so  confines  the  limitation  as  to  admit  of  its  applica- 
tion only  to  purchasers  of  real  estate  from  the  per- 
son liable  for  the  tax.  We  are  of  the  opinion,  how- 
ever, that  this  is  too  narrow  a  construction,  and  that 
the  purpose  of  the  Legislature,  on  the  contrary,  was 
to  establish  a  general  limitation  of  five  years  in 
this  class  of  cases.  The  language  used  is  very 
broad:  'All  collateral  inheritance  taxes  shall  be 
sued  for  within  five  years  after  they  are  due  and 
demandable,  otherwise  they  shall  be  presumed  to 
have  been  paid'.  The  subsequent  clause  referring  to 
the  lien  which  is  a  mere  incident  of  the  tax,  could 
not  be  properly  construed  to  cut  down  this  broad 
laQguage.  We  are  of  the  opinion,  therefore,  that 
his  honor,  the  circuit  judge,  committed  error  in  re- 
fusing to  sustain  the  plea  interposing  this  special 
five  years'  limitation".  Miller  v.  Wolfe,  115  Tenn. 
234. 


253 


CHAPTER  XXIII. 

Tax  Presently  Payable — Refund  on  Subsequent  Devo- 
lution. 


413.  Section  Twenty-five. 

414.  Vested  Eemainder — ^what  Con- 

stitutes. 

415.  Contingent    Interests  —  when 

not  taxable. 

416.  Origin  of  Section  Twenty-five. 

417.  Eemainders  —  Contingent    or 

Defeasible  Interests  are 
Presently  Taxable  and  Tax 
is  Forthwith  Payable  out  of 
Trust  Fund — Constitutional- 
ity Discussed. 

418.  Contingent  Interests  Assessed 

at  Highest  Eate  and  Taxed. 

419.  Tax — When    Payment    Dimin- 

ishes Corpus  of  Trust— not 
Ground  for  Objection. 

420.  Payment  of  Tax  on  Annuities 

out  of  Eesiduum — Amount 
Paid  is  Eeturnable  by  De- 
ducting from  Annuity. 

421.  Payment    of    Tax — ^By    whom 

and  from  what  Property 
Payable. 


422.  Payment  of  Tax — When  Pay- 

able from  Income. 

423.  Contingent    Estates  —  Eeview 

of  Law  Eelative  to  Taxation 
Thereof. 

424.  Remainders  Vesting  under 

Prior  Enactment  Not  Af- 
fected by  Subsequent  Law 
Taxing  at  full  value. 

425.  Values  on  Prior  Appraisement 

not  Determinative  of  Subse- 
quently vesting  estates — no 
Diminution  Allowed  on  Ac- 
count of  Prior  Valuation  of 
Life  Estates. 

426.  Remainder — Effect     of     Prior 

Valuation  on  Section  Ap- 
praisement of  Property 
Postponed  for  Taxation. 

427.  When    Contingent    or    Vested 

Remainder  not  Presently 
Taxable. 

428.  Estates   Appraised  in   Illinois 

after  July  1,  1909. 


413.  Section  Tixrenty-five.  IVlien  property  is 
transferred  or  limited  in  tmst  or  other- 
Tirise,  and  the  rights,  interest  or  estates  of 
the  transferees  or  beneficiaries  are  depend- 
ent npon  contingencies  or  conditions 
■whereby  they  niay  be  xrhoUy  or  in  part 
created,  defeated,  extended  or  abridged,  a 
tax  shall  be  imposed  npon  said  transfer  at 
the  highest  rate  xrhich,  on  the  happen- 
ing of  any  of  the  said  contingencies  or  con- 
ditions wonld  be  possible  under  the  provi- 
sions of  this  article,  and  such  tax  so  im- 
posed shall  be  dne  and  payable  f  orthxirith 
by  the  executors  or  trustees  out  of  the 
property  transferred:  Provided,  hoivever, 
that  on  the  happening  of  any  contingency 


254 

whereby  the  said  property,  or  any  part 
thereof  is  transferred  to  a  person,  corpora- 
tion or  institution  exempt  fom  taxation 
under  the  provisions  of  the  inheritance  tax 
laws  of  this  state,  or  to  any  person,  cor- 
poration or  institution  taxable  at  a  rate 
less  than  the  rate  imposed  and  paid,  such 
person,  corporation  or  institution  shall  be 
entitled  to  a  return  of  so  much  of  the  tax 
imposed  and  paid  as  is  the  diiference  be- 
tween the  amount  paid  and  the  amount 
which  said  person,  corporation  or  institu- 
tion should  pay  under  the  inheritance  tax 
laws,  with  interest  thereon  at  the  rate  of 
three  per  centum  per  annum  from  the  time 
of  payment.  Such  return  of  over-payment 
shall  be  made  in  the  manner  provided  for 
refunds  under  Section  Eight. 

Estates  or  interests  in  expectancy  which 
are  contigent  or  defeasible  and  in  which 
proceedings  for  the  determination  of  the 
tax  have  not  been  taken  or  where  the  tax- 
ation  thereof  has  been  held  in  abeyance, 
shall  be  appraised  at  their  full,  undimin- 
ished value  when  the  persons  entitled 
thereto  shall  come  into  the  beneficial  en- 
jo3rment  or  possession  thereof,  w^ithout 
diminution  for  or  account  of  any  valuation 
theretofore  made  of  the  particular  estates 
for  the  purpose  of  taxation,  upon  which 
said  estates  or  interests  in  expectancy  may 
have  been  limited. 

"Where  an  estate  for  life  or  for  years  can 
be  divested  by  the  act  or  omission  of  the 
legatee  or  devisee  it  shall  be  taxed  as  if 
there  were  no  possibility  of  such  divesting. 

414.     Vested  Remainder— WTiat  Constitutes. 

The  will  of  a  decedent  who  died  a  resident  of  the  State 
of  Illinois  in  1904,  provided  as  follows : 

'^It  is  my  will  that  all  of  the  foregoing  legacies  and 


255 

bequests  be  paid  out  of  money  collected  from  my  life 
insurance  policies  *  *  *  and  all  the  rest,  resi- 
due and  remainder  of  my  estate  *  *  *  I  hereby 
will,  devise  and  bequeath  to  my  executors  and  trus- 
tees in  trust  and  intact,  and  that  the  business  of 
Kingman  &  Co.  and  branch  houses  and  other  cor- 
porations therewith  connected  shall  be  continued  as 
nearly  as  possible  along  the  lines  which  they  have 
been  conducted.  *  *  *  But  it  is  my  desire  that 
the  estate  shall  be  continued  as  a  whole  for  a  period 
of  ten  years,  whereupon  all  of  said  estate  shall  be  di- 
vided and  one-third  of  which  is  to  be  paid  to  my 
wife  to  be  hers  absolutely  forever,  and  two-ninths 
of  which  shall  then  become  the  property  of  each  of 
by  three  children  and  their  several  heirs,  first  re- 
serving a  sufficient  sum  to  carry  out  said  bequests 
that  may  not  have  matured." 

It  was  contended  that  the  terms  of  this  portion  of  the 
will  prevented  the  residuary  estate  from  vesting  in  pos- 
session for  a  period  of  ten  years,  and  that  therefore  no 
tax  could  be  imposed  until  the  estate  came  into  actual 
possession  of  the  beneficiaries.  The  Court  held  the  will 
created  a  vested  estate  and  the  property  was  taxable  as 
of  the  time  of  decedent's  death.  Be  Kingmcmy  220  111. 
563. 

415.     Contingent  Interests — When  Not  Taxable. 

Under  the  Act  of  1895,  transfers  or  successions  limited 
in  trust  or  otherwise,  wherein  the  transferees  or  bene- 
ficiaries are  dependent  upon  contingencies  or  where  the 
interests  or  remainders  are  vested  but  defeasible,  the 
property  limited  is  appraisable,  but  the  tax  on  all  con- 
tingent and  defeasible  estates  and  interests  cannot  be  fixed 
until  the  uncertainty  is  removed  and  the  estate  or  inter- 
est becomes  absolute.  Billings  v.  The  People,  189  111. 
472;  People  v.  McCormiclc,  208  111.  437. 


256 

416.  Origin  of  Section  Twenty-five. 

By  the  first  paragraph  of  Section  25  of  the  Law  of 
1909  it  is  provided  that  a  tax  shall  be  due  and  payable 
forthwith  on  all  transfers  of  property  limited  upon  con- 
tingencies or  conditions.  This  is  taken  from  the  Trans- 
fer Tax  Law  of  New  York  in  force  March  14th,  1899. 

The  second  paragraph  of  Section  25  is  taken  from  the 
Transfer  Tax  Law  of  New  York,  Chapter  284,  Laws  1897, 
in  force  April  16th,  of  that  year.  See  McElroy  on  the 
Transfer  Tax  Law  (N.  Y),  2nd  Ed.  392.  According  to 
McElroy  this  second  paragraph  was  *^  doubtless  inad- 
vertently omitted  from  the  Transfer  Tax  Law  of  New 
York,  in  force  March  14th,  1899,  and  was  re-enacted  by 
Chapter  173,  1901.'' 

The  third  paragraph  of  Section  25  was  taken  from  the 
Transfer  Tax  Law  of  New  York,  in  force  June  15th,  1896, 
and  omitted  from  the  Transfer  Tax  Law  of  1897,  and 
again  re-enacted  in  Section  230,  Transfer  Tax  Law, 
1901.  McElroy  on  the  Transfer  Tax  Law  (N.  Y.),  2nd 
Ed.  393. 

*  *  The  re-enactment  of  said  paragraph  in  the  New  York 
Transfer  Tax  Law  of  1901  was  evidently  caused  by  a 
decision  of  the  Court  of  Appeals  of  New  York  in  Matter 
of  Sloane,  154  N.  Y.  109."  McElroy  on  the  Transfer  Tax 
Law  (N.  Y.),  2nd  Ed.  393. 

417.  Remainders— Contingent    or   Defeasible   In- 

terests Are  Presently  Taxable  and  Tax  Is 
Fortbwitb  Payable  Out  of  Trust  Fund- 
Constitutionality  Discussed. 

**  Prior  to  an  amendment  of  1899  the  Transfer  Tax 
Law  (L.  1896,  ch.  908,  sec.  230,  as  amended  L.  1897, 
ch.  284),  provided  that  *  estates  in  expectancy  which 
are  contingent  or  defeasible  shall  be  appraised  at 
their  full,  undiminished  value  when  the  persons  en- 


257 

titled  thereto  shall  come  into  the  beneficial  enjoyment 
or  possession  thereof.  *  *  *>  Under  this  stat- 
ute it  has  been  repeatedly  held  that  future  contin- 
gent estates  were  not  taxable  until  they  vested  in 
possession  and  the  beneficial  owner  could  be  ascer- 
tained. The  question  now  presented  is  as  to  whether 
this  statute  has  been  changed.  The  Legislature,  by 
chapter  76  of  the  Laws  of  1899,  amended  Section 
230  of  the  Tax  Laws,  known  as  chapter  908  of  the 
Laws  of  1896,  by  which  the  provision  of  the  statute 
quoted  is  omitted  and  in  place  thereof  we  have  the 
following:  *  Whenever  a  transfer  of  property  is 
made,  upon  which  there  is,  or  in  any  contingency 
there  may  be  a  tax  imposed,  such  property  shall  be 
appraised  at  its  clear  market  value  immediately  upon 
such  transfer,  or  as  soon  thereafter  as  practicable.' 
Then  follow  provisions  particularly  specifying  the 
manner  in  which  the  value  of  future  or  limited  es- 
tates shall  be  determined.  Then  it  is  provided  that 
*When  property  is  transferred  in  trust  or  otherwise, 
and  the  rights,  interests  or  estates  of  the  transferees 
are  dependent  upon  contingencies  or  conditions 
whereby  they  may  be  wholly  or  in  part  created,  de- 
feated, extended  or  abridged,  a  ta^  shall  be  imposed 
upon  said  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  the  said  contingencies  or  condi- 
tions, would  be  possible  under  the  provisions  of  this 
article,  and  such  tax  so  imposed  shall  be  due  and 
payable  forthwith,  out  of  the  property  transferred. ' ' 
**It  seems  to  me  clear  that  the  Legislature  by  this 
amendment  intended  to  change  the  law  upon  the  sub- 
ject and  to  make  the  transfer  tax,  upon  property 
transferred  in  trust  payable  forthwith.  The  tax  is 
not  required  to  be  paid  by  the  constitutional  trans- 
feree, for,  by  the  provisions  of  the  statute  it  is  to  be 
paid  *out  of  the  property  transferred.'  So  that  who- 
ever may  ultimately  take  the  property  takes  that 
which  remains  after  the  payment  of  the  tax.  This 
amendment  makes  provision  for  property  transferred 
in  trust.  It,  therefore  contemplates  defeasible 
transfers  as  well  as  absolute  transfers.''  Matter  of 
Vanderhilt,  172  N.  Y.  69.  Also  see  Matter  of  Brez, 
172  N.  Y.  609,  reversing  69  App.  Div.  (N.  Y.)  619. 


258 

418.     Contingent    Interests    Assessed    at    Highest 
Rate  and  Taxed. 

*^  George  H.  Byrd,  a  resident  of  New  York,  died 
testate,  leaving  $74,071.54  of  personal  property  sub- 
ject to  the  Inheritance  Tax  Law  of  this  State.  The 
present  appeal  is  prosecuted  by  the  executors  of  the 
last  will  of  the  testator  from  an  order  of  the  County 
Court  finding  that  $15,590.68  of  said  estate  was  lia- 
ble to  an  Inheritance  Tax  of  $155.91. 

The  State,  by  the  Attorney-General,  has  assigned 
cross  errors  which  raise  the  question  whether  the 
Court  did  not  err  in  refusing  to  hold  that  the  amount 
of  the  Inheritance  Tax  should  be  $355.91,  instead  of 
the  amount  fixed  by  the  Court. 

The  questions  at  issue  arise  out  of  the  following 
facts.  The  fourth  clause  of  the  testator's  will  is  as 
follows : 

Fourth :  *  If  my  wife,  Lucy  Carter  Byrd,  survives 
me,  I  give,  devise  and  bequeath  all  the  rest,  residue 
and  remainder  of  my  estate,  real  and  personal  and 
wheresoever  situated,  unto  her  during  her  life,  and 
upon  her  death  to  my  children,  Anne  Harrison  Byrd, 
Lucy  Carter  Byrd,  William  Byrd  and  Francis  Otway 
Byrd,  share  and  share  alike,  and  if  either  of  my  said 
children,  Anne,  Lucy,  William  or  Francis,  die  leav- 
ing issue,  either  before  me  or  before  my  said  wife, 
then  the  issue  of  the  child  so  dying  shall  take  the 
share  which  his,  her  or  their  parent  would  have  taken 
if  living  at  her  death.  * 

It  is  admitted  that  the  sum  of  $74,071.54  of  the  tes- 
tator's personal  estate  was  disposed  of  under  the 
foregoing  clause  of  his  will.  The  widow's  estate  was 
appraised  at  $18,480.86,  which,  under  the  statute,  was 
exempt  from  any  inheritance  tax.  Deducting  the 
value  of  the  widow's  life  estate  from  the  total  leaves 
$55,590.68,  which  passes  as  a  remainder  under  the 
fourth  clause  of  the  will  above  quoted.  Appellants 
contend  that  the  residue  passed  as  a  vested  remain- 
der to  the  four  children  named  by  the  testator  share 
and  share  alike,  and  that  since  each  share,  when  thus 
divided,  is  less  than  $20,000  there  is  nothing  left  sub- 
ject to  an  inheritance  tax.    Appellee  contends  that  it 


259 

was  the  intention  of  the  testator  to  keep  Ms  estate 
intact  until  the  death  of  his  widow,  and  that  at  that 
time  it  should  vest  in  such  of  the  children  named  as 
might  survive  the  widow  and  the  issue,  if  any,  of  such 
of  the  children  named  as  might  die  before  the  widow. 
In  other  words,  the  People  contend  that  the  remain- 
der was  devised  to  the  children  who  might  survive 
the  widow  as  one  class  and  to  the  issue  of  such  as 
might  predecease  her  as  another  class,  and  that  such 
remainder  was  therefore  contingent.  If  appellants' 
contention  he  sustained,  it  follows  that  the  court 
erred  in  holding  that  any  part  of  said  estate  was 
subject  to  an  Inheritance  tax.  If  appellee  ^s  conten- 
tion be  sustained,  then  it  is  conceded  that  some 
amount  of  Inheritance  Tax  is  due. 

The  principal  controversy  between  the  parties  re- 
lates to  the  construction  to  be  given  to  the  fourth 
clause  of  the  testator's  will.  The  testator  being  a 
resident  of  the  State  of  New  York,  his  will,  so  far 
as  it  affects  personal  property,  is  to  be  construed  by 
the  law  of  New  York.  Upon  this  question  both  par- 
ties agree.  The  only  rule  of  law  relating  to  the  con- 
struction of  wills  that  will  be  necessary  to  refer  to  is 
that  general  and  well-established  rule  that,  in  con- 
struing a  will  the  intention  of  the  testator,  as  ex- 
pressed by  him,  should  be  given  effect,  unless  to  do  so 
would  violate  some  established  principle  of  law  or 
rule  of  public  policy.  This  is  the  same  in  New  York 
as  it  is  in  Illinois.  {Weeks  v.  Cortvell,  104  N.  Y.  325; 
Robinson  v.  Martin,  200  id.  159.)  In  the  case  last 
above  cited  the  Supreme  Court  of  New  York  said: 
*  Precedents  and  rules  frequently  have  but  slight 
value  in  interpreting  wills,  for  those  instruments  are 
rarely,  and  in  the  nature  of  things  are  not  likely  to 
be,  similar  in  terms.  When  the  testator's  intention  is 
obscure  resort  to  them  may  be  helpful  in  ascertain- 
ing it :  Where,  upon  inspection  of  the  will  and  upon 
a  consideration  of  relevant  facts  and  circumstances, 
an  intent  is  apparent,  all  rules  to  the  contrary  must 
yield,  provided  that  an  intent  does  not  offend  against 
public  policy  or  some  positive  rule  of  law.  It  may 
well  be  said  that  some  of  the  rules  of  construction  re- 
quire a  greater  force  of  intention  to  control  them, 


260 

but  if  it  be  found  in  the  instrument  it  should  be  al- 
lowed/    *     *     * 

Gruided  by  this  general  rule  we  think  that  the  in- 
tention of  the  testator  is  so  clearly  expressed  in  the 
fourth  clause  of  his  will  that  it  is  possible  to  under- 
stand it  without  resorting  to  technical  rules  of  con- 
struction. The  first  sentence  in  clause  four  clearly 
gives  the  testator's  wife  a  life  estate  in  all  of  the  re- 
mainder of  the  estate,  both  real  and  personal,  wher- 
ever situated.  After  devising  the  life  estate  to  his 
wife,  the  testator  proceeds  as  follows:  ^And  upon 
her  death  to  my  children  (naming  them),  share  and 
share  alike.' 

If  the  clause  had  ended  here  there  would  be  much 
force  in  appellants'  contention  that  the  remainder 
was  vested,  and  that  the  words  *upon  her  death' 
merely  refer  to  the  time  when  the  devisees  named 
were  to  come  into  the  enjoyment  of  the  estate;  but  we 
think  that  the  intention  to  postpone  the  vesting  as 
well  as  the  enjoyment  of  the  estate  is  clearly  made  to 
appear  by  what  follows  in  said  clause.  The  clause 
in  question  contains  the  following  additional  lan- 
guage: ^And  if  either  of  my  said  children,  Anne, 
Lucy,  William  or  Francis,  die  leaving  issue,  either 
before  me  or  before  my  said  wife  then  the  issue  of 
the  child  so  dying  shall  take  the  share  which  his,  her 
or  their  parent  would  have  taken  if  living  at  her 
death/  The  words  4f  living  at  her  death'  clearly 
indicate  that  a  child  must  be  living  at  her  death — that 
is,  the  death  of  the  widow — in  order  to  take  under 
the  will.  If,  as  appellants  contend,  the  estate  vested 
in  the  children  at  the  death  of  the  testator,  mani- 
festly they  would  not  take  at  the  death  of  the  widow. 
If  the  testator  intended  that  each  of  his  children 
should  take  a  vested  interest  at  the  time  of  his  death, 
and  wanted  to  provide  for  the  children  of  any  that 
might  die  before  the  estate  vested,  he  would  natur- 
ally and  reasonably  have  used  the  words  *  which  his, 
her  or  their  parent  would  have  taken  if  living  at  my 
death,'  but  he  uses  the  words  4f  living  at  her  death/ 
referring  to  the  death  of  his  wife.  This  conclusion 
seems  more  reasonable  when  the  fifth  clause  of  the 
will  is  read.     *     *     * 


261 

Had  the  widow  not  survived  the  testator  the  prop- 
erty in  question  would  have  passed,  upon  the  testa- 
tor's death,  under  the  fifth  clause.  There  the  inten- 
tion to  vest  the  property  at  the  time  of  the  testa- 
tor's death  in  the  event  the  wife  did  not  survive  him 
is  made  very  clear.  Beading  these  two  clauses  to- 
gether, we  are  forced  to  the  conclusion  that  the  tes- 
tator used  the  words  in  the  fourth  clause,  4f  living  at 
her  death,'  advisedly,  and  that  thereby  clearly  in- 
tended that  the  estate  should  not  vest  in  the  remain- 
dermen until  the  death  of  his  widow.  In  our  opin- 
ion, the  remainder  to  the  children  was  contingent. 

The  Court  did  not  err  in  holding  that  there  was  a 
liability  here  under  the  Inheritance  Tax  Act  but  it 
did  err  in  fixing  the  amount  of  said  tax.  In  deter- 
mining the  amount  of  Inheritance  Tax  under  the  In- 
heritance Tax  Law,  the  Court  should  take  the  highest 
amount  that  in  any  contingency  would  become  liable 
to  the  tax.  A  possible  contingency  here  is  that  three 
of  the  four  devisees  named  may  die  before  the  wid- 
ow, leaving  no  issue.  In  that  contingency  the  one 
survivor  would  receive  all  of  the  estate,  for  the  rea- 
son such  one  would  be  the  only  representative  of  the 
class  living  at  the  time  the  estate  vests.  The  court 
below  did  not  adopt  this  rule,  but  supposed  the  pos- 
sible contingency  that  two  of  the  children  named 
should  die  without  issue  before  the  widow,  leaving 
two  survivors  of  the  class  to  take  the  estate.  The 
court  then  divided  the  devise  equally  between  the 
two  supposed  survivors  and  deducted  $20,000  from 
each  share  to  arrive  at  the  amount  of  the  tax  due. 
Under  the  rule  requiring  the  court  to  adopt  the  high- 
est amount  that  in  any  contingency  can  pass,  the 
amount  here  was  subject  to  only  one  deduction  of 
$20,000.  No  case  involving  the  construction  of  the 
Inheritance  Tax  Law  in  this  regard  has  heretofore 
come  before  this  court,  but  our  statute  in  this  respect 
is  identical  with  the  statute  of  New  York.  Section 
25  of  the  New  York  statute  has  been  construed  by 
the  Court  of  Appeals  of  New  York  in  accordance 
with  these  views.  {Re  Vanderhilt,  172  N.  Y.  69 ;  Re 
Brez,  172  N.  Y.  609.) 


262 

The  judgment  of  the  County  Court  of  Cook  County 
is  reversed  on  the  cross-errors  and  the  cause  re- 
manded to  that  court,  with  directions  to  enter  judg- 
ment for  $355.91,  which  is  the  correct  amount  of  In- 
heritance Tax  due.'' 

Byrd  v.  People,  253  HI.  223.    (Adv.  sheets.) 

419.  Tax — When  Payment  Diminislies  Corpus  of 

Trust— Not  Ground  for  Objection. 

**Both  the  life  tenant  and  remainderman  took  their  re- 
spective interests  in  the  property,  as  a  matter  of  sover- 
eign power.  Neither  is  the  life  tenant  in  a  position  to 
complain  that  the  principal  of  which  she  is  entitled  to  the 
use  is  diminished  by  the  tax,  nor  can  the  remainderman 
resist  the  imposition  of  the  tax  upon  the  ground  that  he 
may  never  come  into  possession  of  the  property."  Matter 
of  Bushnell,  73  App.  Div.  (N.  Y.)  325. 

420.  Payment  of  Tax  on  Annuities  Out  of  Resi- 

duum— Amount  Paid  Is  Returnable  by  De- 
ducting from  Annuity. 

The  payment  of  Inheritance  Taxes  fixed  upon  the  pres- 
ent value  of  an  annuity  is  payable  out  of  the  corpus  of 
the  fund  limited  to  support  such  annuity,  and 

*  *  The  method  of  returning  to  the  residuary  estate 
the  tax  so  paid  by  the  trustees  is  as  follows:  Take 
for  illustration  an  annuitant  whose  probable  dura- 
tion of  life  is  ten  years.  The  trustees  would  deduct 
from  each  annual  payment  as  made  one-tenth  of  the 
tax  and  restore  it  to  the  residuary  estate. 

In  the  case  at  bar  the  death  of  the  annuitant  was 
suggested  on  the  argument  as  having  taken  place 
since  that  of  the  testator.  Any  portion  of  the  trans- 
fer tax  not  restored  to  the  estate  by  the  process  indi- 
cated, at  the  time  of  the  annuitant's  death  would  be  a 
loss  which  the  residuary  estate  must  sustain. ' '  Mat- 
ter of  Tracy,  179  N.  Y.  501. 


263 

421.  Payment  of  Tax— By  ^Vhom  and  from  What 

Property  Payable, 

Section  25  of  the  Laws  of  1909  (Illinois)  provides  that 
the  tax  * '  shall  be  due  and  payable  forthwith  by  the  execu- 
tors or  trustees  out  of  the  property  transferred/'  In 
interpreting  a  similar  section  of  the  New  York  Law,  the 
Court  of  Appeals  held: 

**It  thus  appears  that  whenever  a  transfer  of  prop- 
erty is  made,  upon  which  there  is,  or,  by  any  con- 
tingency there  may  be  a  tax  imposed,  the  property  is 
to  be  properly  appraised  at  its  clear  market  value, 
and  the  transfer  tax  is  due  and  payable  forthwith  out 
of  the  property  transferred.  In  Matter  of  Vcmder- 
hilt,  172  N.  Y.  69,  this  Court  construed  Section  230 
of  the  Transfer  Tax  Law  (N.  Y.)  as  affecting  the  pay- 
ment of  tax  upon  contingent  remainders  and  held 
that  the  tax  was  payable  forthwith  out  of  the  prop- 
erty transferred.  Judge  Haight,  writing  for  the 
Court,  said: 

It  seems  to  me  clear  that  the  Legislature  by  this 
amendment  intended  to  change  the  law  upon  the  sub- 
ject and  to  make  the  transfer  tax  upon  the  property 
transferred  in  trust,  payable  forthwith.  The  tax  is 
not  required  to  be  paid  by  the  conditional  trans- 
feree, for,  by  the  provision  of  the  statute  it  is  to  be 
paid  out  of  the  property  transferred. ' 

So  that  whoever  may  ultimately  take  the  property 
takes  that  which  remains  after  the  payment  of  the 
tax.''    Matter  of  Tracy,  179  N.  Y.  501-509. 

422.  Payment  of  Tax— VTlien  Payable   from  In- 

come. 

See  in  Re  Hoyt,  76  N.  Y.  S.  504. 

423.  Contingent   Estates — Reviexir   of  Law   Rela- 

tive to  Taxation  Thereof. 

In  the  appeal  from  an  appraisement  of  the  estate  of 
George  N.  Kennedy,  deceased,  who  died  September  7th, 


264 

1901,  a  resident  of  New  York,  the  question  arose  whether 
future  contingent  estates  were  presently  taxable.  The 
Court  said: 

^^The  surrogate  at  first  held  the  interests  taxable 
presently,  but  on  appeal  reversed  himself,  and  held 
they  were  not  taxable  until  possession  thereof  was 
secured  by  the  persons  interested  therein.  This  lat- 
ter decision  was  based  upon  a  construction  of  the 
statute  which  we  regard  as  erroneous.  Prior  to  1899, 
Section  230  of  the  Tax  Law  (Ch.  908,  p.  795,  Laws 
1896)  as  amended  by  Ch.  284,  p.  150,  Laws  1897,  pro- 
vided: 

'Estates  in  expectancy  which  are  contingent  or  de- 
feasible shall  be  appraised  at  their  full,  undimin- 
ished value  when  the  persons  entitled  thereto  shall 
come  into  the  beneficial  enjoyment  or  possession 
thereof,  etc' 

Under  this  provision  of  the  statute  it  was  repeat- 
edly held  that  future  contingent  estates  were  not  tax- 
able until  they  vested  in  possession  and  the  benefi- 
cial owner  could  be  ascertained.  Matter  of  Vander- 
bilt's  Estate,  172  N.  Y.  69;  64  N.  E.  782.  This  sec- 
tion was  amended  by  Chapter  76,  p.  100,  Laws  1899, 
and  the  provision  above  quoted  was  omitted,  and  in 
place  thereof  the  following  provision  was  inserted : 

'Whenever  a  transfer  of  property  is  made,  upon 
which  there  is,  or  in  any  contingency  there  may  be, 
a  tax  imposed,  such  property  shall  be  appraised  at  its 
clear  market  value  immediately  upon  such  transfer, 
or  as  soon  thereafter  as  practicable  *  *  *.  When 
property  is  transferred  in  trust  or  otherwise,  and 
the  rights,  interests  or  estates  of  the  transferees  are 
dependent  upon  contingencies  or  conditions  whereby 
they  may  be  wholly  or  in  part  created,  defeated,  ex- 
tended or  abridged,  a  tax  shall  be  imposed  upon  said 
transfer  at  the  highest  rate  which,  on  the  happening 
of  any  of  the  said  contingencies  or  conditions,  would 
be  possible  under  the  provisions  of  this  article,  and 
such  tax  so  imposed  shall  be  due  and  payable  forth- 
with, out  of  the  property  transferred.' 

And  it  was  held  by  this  amendment  that  a  change 


265 

was  intended  making  contingent  estates  taxable 
forthwith.  Matter  of  VcmderhiWs  Estate,  supra. 
In  1901  this  section  was  again  amended  (Chapters 
173,  493,  pp.  380,  1226,  Laws  1901),  by  inserting 
therein  after  the  provisions  last  above  quoted  the 
following : 

*  Estates  in  expectancy  which  are  contingent  or 
defeasible  (and  in  which  proceedings  for  the  deter- 
mination of  the  tax  have  not  been  held  in  abeyance) , 
shall  be  appraised  at  their  full  undiminished  value 
when  the  persons  entitled  thereto  shall  come  into  the 
beneficial  enjoyment  or  possession  thereof,  etc' 

The  controversy  is  as  to  the  construction  of  this 
provision  in  the  amendment  of  1901.  It  will  be  ob- 
served that  the  language,  except  that  which  we  have 
included  in  brackets,  is  the  same  as  the  clause  above 
quoted  from  the  amendment  of  1897,  which  was  omit- 
ted entirely  in  the  amendment  of  1899.  This  lan- 
guage in  the  amendment  of  1901  does  not  apply  to  all 
estates  of  the  kind  named,  but  is  limited  by  the  lan- 
guage in  brackets  to  those  in  which  proceedings  to 
tax  had  not  been  commenced  or  the  taxation  had 
been  held  in  abeyance.  The  surrogate  construed 
the  first  clause  in  this  limitation  as  covering  all  such 
estates  transferred  after  the  amendment  of  1901 
went  into  effect,  and  therefore  as  covering  the  es- 
tates herein.  If  this  were  the  intention  of  the  Leg- 
islature the  language  inserted  in  the  amendment  of 
1899,  making  such  estates  presently  taxable,  would 
not  have  been  retained  in  the  amendment  of  1901. 
There  would  have  been  no  occasion  for  it.  By  the 
amendment  of  1897,  these  estates  were  not  taxable 
presently,  but  the  taxation  thereof  was  held  in  abey- 
ance. By  the  amendment  of  1899  the  language  of  the 
amendment  of  1897  referred  to  was  omitted,  and  the 
provision  expressly  made  for  taxation  presently. 
The  intention  of  the  Legislature  was  thus  made  clear 
and  certain  to  change  from  a  future  to  a  present 
taxation  in  all  cases  of  such  estates.  Then  by  the 
amendment  of  1901  this  language  of  the  amendment 
of  1899  was  retained,  showing  the  general  legislative 
intent  remained  the  same,  and  the  language  here  in 


266 

question  was  inserted,  providing  that  in  certain  spe- 
cified cases  a  future  taxation  was  intended  as  under 
the  amendment  of  1897.  It  is  apparent  that  the  cases 
so  intended  to  be  provided  for  were  limited  in  num- 
ber, and  not  all  the  cases  thereafter  occurring. 

We  think  this  provision  was  intended  to  apply 
only  to  those  cases  unprovided  for  by  the  statute  of 
1899,  and  left  so  until  1901,  where  the  transfers  had 
occurred  prior  to  1899,  and  there  had,  under  the 
amendment  of  1897,  been  no  proceedings  taken  to 
impose  the  tax ;  the  taxation  had  been  held  in  abey- 
ance until  the  future  time,  when  the  tax  should  be 
assessed  under  the  amendment  of  1897.  In  view  of 
the  amendment  of  1899  omitting  the  provision  as  to 
future  assessments  contained  in  the  amendment  of 
1897,  these  cases  were  covered  by  no  provision  of 
the  statute,  and  hence  this  one  was  inserted  in  the 
amendment  of  1901  to  provide  therefor.  We  do  not 
think  the  Legislature  intended  to  change  the  general 
policy  of  present,  instead  of  future,  assessments  of 
estates  of  this  nature  which  was  clearly  indicated 
in  the  amendment  of  1899,  and  which  was  retained 
in  the  amendment  of  1901.^'  Miller  v.  Tracy  et  al,, 
86  N.  Y.  S.  1024;  93  App.  Div.  (N.  Y.)  27. 

424.  Remainders  Vesting  Under  Prior  Enact- 
ment Not  Affected  by  Subsequent  Laiv-  Tax- 
ins  at  Full  Value. 

Decedent  died  testate  in  1887  and  by  his  will  provided : 

*  *  To  my  brother,  Lonis  Meyer,  of  Cleveland,  Ohio, 
and  to  members  of  his  family  I  give  the  income  of 
$40,000.00  during  his  life,  the  principal  of  this  leg- 
acy to  be  set  apart  and  invested  by  my  executors, 
and  held  by  them  in  trust  and  the  income  thereof 
paid  to  my  said  brother,  or  to  his  family,  at  the  dis- 
cretion of  said  executors,  at  convenient  intervals. 
If  the  income  is  insufficient,  then  to  take  from  the 
principal,  and  etc.,  at  the  death  of  my  said  brother, 
such  of  the  principal  as  remains  unexpended,  shall 
go  to  and  be  equally  divided  among  his  issue,  per 
stirpes/* 


267 

Louis  Meyer  survived  and  died  May  13th,  1902,  leaving 
issue.  In  an  appraisement  of  the  estate  of  William 
Meyer,  under  the  Law  of  1885  as  amended  in  1887,  the 
Appraiser  reported  that  no  appraisement  could  be  made 
of  the  bequest  of  $40,000.00  as  it  cannot  be  determined 
what  property  will  pass  to  the  issue  of  Louis  Meyer. 
This  report  was  confirmed  by  the  surrogate  and  no  tax 
was  imposed  upon  the  transfer  of  this  bequest.  On  the 
death  of  said  Louis  Meyer,  as  aforesaid,  another  Ap- 
praiser was  appointed  and  from  the  testimony  before 
said  last  Appraiser,  it  appeared  that  this  fund  of  $40,- 
000.00  was  retained  by  the  executors  in  trust  for  Louis 
Meyer ;  that  the  total  income  of  said  trust  fund  was  paid 
by  the  executors  to  Louis  Meyer  and  there  was  also  paid 
to  him  out  of  the  principal,  in  pursuance  of  the  discre- 
tion vested  in  the  trustees,  the  sum  of  $14,000.00.  That 
there  was  in  the  hands  of  the  surviving  trustee,  upon  the 
death  of  Louis  Meyer,  $30,900.00  in  cash,  which  was  pay- 
able to  the  remaindermen,  referred  to  in  the  will  of  Wil- 
liam Meyer.  The  last  Appraiser  appraised  the  property 
in  the  hands  of  the  trustee  as  of  May  13,  1902,  the  date 
of  death  of  Louis  Meyer. 

It  was  insisted  by  the  trustees  that  the  property  was 
to  be  valued  as  of  the  time  of  the  death  of  William 
Meyer  and  should  be  taxed  as  of  that  time.  The  Court 
held  that  the  remainder  vested  in  said  remaindermen  as 
of  the  time  of  the  death  of  William  Meyer.  That  ac- 
cording to  the  language  of  the  will  it  could  not  be  defi- 
nitely determined  to  whom  the  property  went  until  the 
death  of  the  life  tenant,  Louis  Meyer.  That  the  trust 
fund,  subject  to  its  depletion  vested  absolutely  in  the 
beneficiaries  upon  the  death  of  William  Meyer.  That 
whatever  rights  the  children  of  Louis  Meyer  acquired 


268 

they  acquired  at  the  death  of  the  original  testator  and 

that  it  was  this  right  of  succession  that  was  taxable 

under  the  statute  of  1885  as  amended  in  1887.    Section 

230,  Tax  Law  1896,  Ch.  908,  as  amended  by  L.  1902,  Ch. 

496,  provides : 

*^  Estates  in  expectancy  which  are  defeasible  and 
in  which  proceedings  for  the  determination  of  the 
tax  have  not  been  taken,  or  where  the  taxation 
thereof  has  been  held  in  abeyance,  shall  be  ap- 
praised at  their  full  undiminished  value,  when  the 
persons  entitled  thereto  shall  come  into  the  benefi- 
cial enjoyment  or  possession  thereof,  without  dimi- 
nution for  or  on  account  of  any  valuation  thereto- 
fore made  of  the  particular  estates  for  the  purposes 
of  taxation,  etc/' 

The  Court  held  that  this  provision  is  not  made  to  ap- 
ply to  a  remainder  which  had  vested  prior  to  the  passage 
of  the  Act  and  that  it  is  a  universal  principle  that  a 
retroactive  effect  will  not  be  given  to  a  law  unless  such 
intention  is  plainly  expressed  therein.  That  when  the 
remainder  vested  a  specific  tax  was  assessable  upon  the 
transfer  to  these  beneficiaries.  Surrogate  reversed. 
Matter  of  Meyer,  83  App.  Div.  (N.  Y.)  381. 

425.  Values  on  Prior  Appraisement  Not  Deter- 
minative of  Subsequently  Vesting  Estates 
— No  Diminution  Allowed  on  Account  of 
Prior  Valuation  of  Life  Estates. 

*' Joseph  Naylor  died  testate  June  7,  1897,  dom- 
iciled in  the  State  of  New  York,  and  by  his  will  de- 
vised real  estate  in  trust  for  the  benefit  of  his  wife 
during  her  life  and  directed  upon  her  death  ^  to  hold 
such  real  estate  upon  seven  separate  trusts  for  the 
benefit  of  his  seven  nephews  and  nieces  respectively, 
paying  to  each  the  net  income  of  one  equal  one- 
seventh  during  his  or  her  life,  with  remainder  in 
each  case  to  his  or  her  surviving  lineal  descend- 
ants. ' 


269 

An  Appraiser  was  appointed  to  fix  the  transfer 
tax  and  reported  the  net  value  of  real  estate  passing 
under  the  will  to  be  $271,000.00.  This  he  (appraiser) 
divided  into  seven  equal  parts,  one  for  each  of  the 
life  tenants,  and  fixed  the  cash  value  of  the  life  es- 
tate, as  well  as  the  remainder  in  each  case.  The 
value  of  the  life  estate  of  Sarah  Morgan  Mason 
(one  of  the  nieces)  was  fixed  at  $15,306.00,  and  the 
tax  imposed  thereon  was  $765.35.  The  value  of  the 
remainder  limited  upon  her  life  was  fixed  (by  ap- 
praiser) at  $22,316.00,  but  no  tax  was  imposed 
thereon  because,  according  to  his  (appraiser)  report 
it  could  not  then  be  definitely  determined  to  whom 
such  remainder  would  ultimately  descend.  This  re- 
port was  confirmed  by  the  surrogate  and  no  appeal 
was  taken  therefrom.  Said  Sarah  Morgan  Mason 
died  November  27th,  1905,  leaving  Walter  E.  Mason 
and  Edgar  F.  Mason,  her  sons  and  only  surviving 
descendants.  'They  each,  under  the  will  of  Joseph 
Naylor,  became  entitled  to  one-half  of  the  one-sev- 
enth given  to  their  mother  for  life.  Shortly  after 
the  mother's  death  they  applied  to  the  surrogate  for 
an  order  fixing  the  amount  of  the  transfer  (inheri- 
tance) tax  upon  the  remainder  limited  upon  the  life 
of  their  mother  and  which  (said  remainder)  had 
previously  been  valued  by  the  Appraiser  at  $22,- 
316.00.  The  statute  in  force  at  the  time  of  Naylor 'g 
death  and  under  which  the  transfer  tax  had  to  be  de- 
termined was  Ch.  287,  L.  1897.' 

A  question  arose  whether  the  value  of  the  re- 
mainder as  fixed  in  the  original  appraisement  at 
$22,316.00  should  be  the  value  for  taxation  passing 
to  Walter  E.  and  Edgar  F.  Mason,  sons.  The  sur- 
rogate held  that  the  value  of  $22,316.00  was  not  the 
basis  of  taxation,  but  held  that  the  value  of  the  real 
estate  passing  in  enjoyment  to  said  Walter  E.  Ma- 
son and  Edgar  F.  Mason  should  be  determined  at 
the  time  of  the  passing  and  should  not  be  dimin- 
ished by  the  value  of  the  estate  of  their  mother,  first 
above  fixed  and  taxed.  The  Court,  in  rendering  its 
decision  quotes  Tax  Law  N.  Y.  1896,  Ch.  908,  Sec. 
230,  as  amd.  by  L.  1897,  Ch.  284,  which  provides— 


270 

*  Estates  in  expectancy  which  are  contingent  or  de- 
feasible, shall  be  appraised  at  their  full  undimin- 
ished value  when  the  persons  entitled  thereto  shall 
come  into  the  beneficial  enjoyment  or  possession 
thereof  without  diminution  for,  or  on  account  of,  any 
valuation  theretofore  made  of  the  particular  estates 
for  purposes  of  taxation,  upon  which  said  estates 
in  expectancy  may  have  been  limited.' 

It  was  contended  by  said  remaindermen  on  appeal 
to  the  Surrogate  Court  that  the  first  appraisement 
was  res  adjudicata  of  the  question  of  taxation  and 
valuation  of  the  property  passing  by  the  will  of  said 
Naylor.  That  an  error  of  law  was  committed  in  the 
original  appraisement  which  could  only  be  corrected 
by  appeal  and  that  no  appeal  was  taken  by  the  State, 
and  therefore  said  State  is  in  no  position  to  assert 
that  the  order  was  erroneous.  The  Court  held,  that 
the  value  of  the  estate  passing  to  the  remaindermen 
was  not  before  the  first  Appraiser.  That  there  was 
no  necessity  for,  and  he  had  no  authority  to  pass 
upon  that  question.  {Matter  of  Earle,  74  App.  Div. 
(N.  Y.)  458;  Matter  of  GoeleVs  Estate,  78  N.  Y.  S. 
47.)  That  a  judicial  determination,  whether  it  be 
judgment,  order  or  decree,  is  conclusive  only  in  re- 
spect to  the  grounds  covered  by  it  and  the  necessary 
facts  passed  upon  to  uphold  it,  although  it,  in  ex- 
press terms,  purports  to  determine  a  particular  fact, 
yet  if  such  fact  were  immaterial,  the  judgment,  order 
or  decree  will  not  conclude  the  parties  in  reference 
thereto.  That  it  is  only  material,  relevant  and  nec- 
essary facts  decided  which  are  finally  and  conclu- 
sively determined.  (Stokes  v.  Foote,  172  N.  Y.  327; 
House  V.  Lockwood,  137  N.  Y.  259 ;  Springer  v.  Bien, 
128  N.  Y.  99;  Campbell  v.  Gonsalus,  25  N.  Y.  613, 
etc.). 

The  Court  further  held  that  the  fact  that  the  Ap- 
praiser undertook  to  determine  the  value  of  the  es- 
tate which  would  ultimately  pass  to  the  remainder- 
men, did  not  bind  them  because  they  were  not  rep- 
resented, and  if  it  did  not  bind  them  it  cannot  be 
claimed  that  it  bound  the  State. 

In  this  case  the  remaindermen  had  no  notice  of 


271 

the  appraisement.  A  tax  was  assessed  upon  the  full 
value  of  the  real  estate  passing  to  Walter  R.  and 
Edgar  F.  Mason  without  diminution  of  the  life  es- 
tate.   Matter  of  Mason,  120  App.  Div.  (N.  Y.)  738.'' 


426.  Remainder^ — Effect  of  Prior  Valuation  on 
Second  Appraisement  of  Property  Post- 
poned for  Taxation. 

A  testator  died  in  August,  1897,  leaving  a  will,  by 
which  he  gave  one-half  of  his  residuary  estate  in  trust 
for  the  benefit  of  his  son  Eobert,  directing  his  executor 
to  pay  to  said  son  upon  attaining  majority,  his  share 
in  the  residuary  estate.  In  a  proceeding  theretofore  had 
for  the  purpose  of  assessing  the  transfer  tax,  the  Ap- 
praiser determined  the  present  value  of  the  use  of  the 
fund  of  $500,000.00  for  the  period  intervening  between 
the  death  of  the  testator  and  his  majority.  In  the  Ap- 
praiser's report  the  value  of  the  remainder  interest,  as 
shown  by  the  certificate  of  the  insurance  department, 
which  was  attached  to  said  report,  was  $399,675.00.  The 
Appraiser  reported  that  the  said  remainder,  as  well  as 
other  interests  of  a  similar  character  passing  by  the  will, 
were  not  then  taxable,  as  it  was  not  then  ascertainable 
to  whom  said  interests  would  finally  pass.  An  order  was 
entered  on  such  report,  fixing  the  tax,  and  providing 
**that  the  matter  of  fixing  the  tax,  on  the  interests  or 
shares  in  remainder  passing  under  said  will  which  may 
be  subject  to  taxation  under  the  said  Act,  be,  and  the 
same  is  hereby,  reserved  until  it  is  ascertainable  to  whom 
the  interests  of  shares  in  remainder  will  finally  pass. 
The  legatee  attained  the  age  of  21  years  in  January, 
1901,  when  the  said  sum  of  $500,000.00  became  payable, 
as  directed  by  the  will.  The  executors  ask  that  the  Court 
make  an  order  fixing  the  tax  upon  the  interest  in  re- 


272 

mainder  in  said  sum  at  the  value  ascertained  by  the 
Appraiser,  as  above  stated.  An  order  was  submitted 
which  assesses  the  tax  upon  the  value  of  the  remainder 
interest  as  fixed  by  the  Appraiser's  report. 

By  the  laws  in  existence  at  the  date  of  death  of  the 
decedent  (Section  230,  C.  908,  L.  1896,  as  amd.  by  Ch. 
284,  L.  1897,  estates  in  expectancy,  which  are  contin- 
gent or  defeasible  shall  be  appraised  at  their  full,  un- 
diminished value  when  the  person  entitled  thereto  shall 
come  into  the  beneficial  enjoyment  or  possession  thereof, 
without  diminution  for  or  on  account  of  any  valuation 
theretofore  made  of  the  particular  estates  for  purposes 
of  taxation,  upon  which  said  estates  in  expectancy  may 
have  been  limited.  Chap.  76  of  the  Laws  of  1899,  which 
became  a  law  March  14th  of  that  year,  in  amending  Sec- 
tion 230,  omitted  the  clause  quoted,  and  provided  for  the 
immediate  assessment  and  payment  of  the  tax  upon  con- 
tingent interests. 

The  value  of  the  estate  now  transferred  by  the  exec- 
utor to  the  legatee  must  be  assessed  at  the  value  of  the 
principal  fund,  undiminished  by  the  value  of  the  estate 
during  the  minority  of  the  legatee,  heretofore  assessed 
for  the  purpose  of  taxation.  Re  Goelet^s  E state ,  78  N. 
Y.  S.  47. 

427.     "When  Contingent  or  Vested  Remainder  Not 
Presently  Taxable. 

It  has  been  held  in  Matter  of  Bahcoch,  37  Misc.  Eep. 
(N.  Y.)  445 ;  75  N.  Y.  S.  926,  and  affirmed  in  81  App.  Div. 
(N.  Y.)  645,  81  N.  Y.  S.  1117,  that  a  limitation  giving  a 
life  tenant  the  right  to  use  a  part  or  all  of  the  principal 
is  not  taxable  until  the  death  of  the  tenant. 


273 

428.     Estates  Appraised  in  Illinois  After  July  1, 
1909. 

A  decedent  who  died  prior  to  July  1st,  1909,  and  on 
or  after  July  1st,  1895,  transferring  property  within  the 
jurisdiction  of  the  State  of  Illinois,  but  first  appraised 
after  July  1st,  1909,  is  taxable  at  the  rates  and  entitled 
to  exemptions  as  provided  by  the  law  of  1895.  Matter  of 
Davis,  149  N.  Y.  539.  But  the  procedure  in  the  appraise- 
ment proceeding  is  governed  by  the  law  in  force  at  the 
time  of  appraisement.    Matter  of  Sloane,  154  N.  Y.  109. 


274 

CHAPTEE  XXIV. 

Compromise  of  Tax. 

429.  Section  Twenty-six.  The  State  Treasurer, 
by  and  with  the  consent  of  the  Attorney 
General  expressed  in  w^riting,  is  hereby 
empowered  and  authorized  to  enter  into  an 
agreement  with  the  trustees  of  any  estate 
in  which  remainders  or  expectant  estates 
have  been  of  such  a  nature,  or  so  disposed 
and  circumstances  that  the  taxes  therein 
were  held  not  presently  payable  or  where 
the  interests  of  the  legatees  or  devisees 
were  not  ascertainable,  or  w^here  the  inter- 
ests of  the  legatees  or  devisees  were  not  as- 
certainable under  an  act  to  tax  gifts,  lega- 
cies, and  inheritances,  etc.,  in  force  July  1, 
1885  (1895)  and  amendments  thereto;  and 
to  compound  such  taxes  upon  such  terms  as 
may  be  deemed  equitable  and  expedient; 
and  to  grant  discharge  to  said  trustees 
upon  the  payment  of  the  taxes  provided 
for  in  such  composition:  Provided,  how^- 
ever,  that  no  such  composition  shall  be 
conclusive,  in  favor  of  said  trustees  as 
against  the  interests  of  such  cestuis  que 
trust  as  may  possess  either  present  rights 
of  enjoyment  or  fixed  absolute  or  inde- 
feasible rights  of  future  enjoyment,  or  of 
such  as  w^ould  possess  such  rights  in  the 
event  of  the  immediate  termination  of  par- 
ticular estates,  unless  they  consent  thereto, 
either  personally,  -when  competent,  or  by 
g^uardian.  Composition  or  settlement  made 
or  effected  under  the  provisions  of  this 
section  shall  be  executed  in  triplicate,  and 
one  copy  filed  in  the  office  of  the  State 
Treasurer,  one  copy  in  the  office  of  the 
clerk  of  the  County  Court  wherein  the  ap- 
praisement was  had  or  the  tax  was  paid, 


275 

and  one  copy  delivered  to  the  executors,  ad- 
ministrators or  trustees  -wlio  shall  be  par- 
ties thereto. 

429a.     Clerical  Error. 

The  reference  to  *^An  Act  to  Tax  Gifts,  Legacies,  and 
Inheritances,  etc.,  in  force  July  1,  1885''  is  a  clerical  er- 
ror. The  Act  referred  to  is  the  Inheritance  Tax  Law  of 
1895. 

No  questions  have  arisen  under  this  Section  which  have 
been  considered  or  reviewed  by  a  Court.  (The  form 
composition  agreement  used  in  settlements  of  tax  under 
this  Section  is  found  under  ** Forms''). 


276 


CHAPTER  XXV. 

Special  Guardian. 

430.  Section  Twenty-seven.  I  432.  Special  Guardian — when  Nec- 

431.  Special    Guardian — ^when    Un-  I  essary. 

necessary.  I 

430.  Section  Twenty-seven.     If  it  appears  at  any 

stage  of  an  inheritance  tax  proceeding  that 
any  person  knoivn  to  be  interested  therein 
is  an  infant  or  person  under  disability,  the 
county  judge  may  appoint  a  special  guar- 
dian of  such  infant  or  person  under  dis- 
ability. 

431.  Special  Guardian— When  Unnecessary. 

When  the  law  fails  to  provide  for  the  representation 
of  minors  by  special  guardian,  the  surrogate's  order 
cannot  be  attacked  on  the  ground  that  minors  were  not 
before  the  court,  and  if  such  minors  were  in  any  way 
before  the  court,  their  interests  were  comprehended  in 
the  appraisement.  Matter  of  Jones,  54  Misc.  Rep.  (N. 
Y.)  202.    Matter  of  Post,  5  App.  Div.  (N.  Y.)  113. 

432.  Special  Guardian— When  Necessary. 

When  an  appraisement  involves  the  interest  of  minors 
to  the  extent  that  their  rights  may  be  affected,  such 
minors  should  be  represented  by  special  guardians.  Re 
Gould's  Estate,  48  N.  Y.  S.  872. 


277 


CHAPTER  XXVI. 


Exception  of  Religious,  Educational,  Chabitablb  and 
Benevolent  Bequests. 


433.  Section  Twenty-eight. 

434.  Exemptions  to  Religious,  Edu- 

cational and  Benevolent  In- 
stitutions —  Amendment  of 
1901— Illinois. 

435.  Foreign   Educational   Corpora- 

tion Taxable  —  Amendment 
1901  Constitutional. 

436.  Charity — Definition. 

437.  Public  Charity — Statute   of   a 

Horse  with  Drinking  Foun- 
tain. 

438.  Religious  Corporation  —  when 

Organized  under  Laws  of 
Foreign  State. 

Foreign  Corporations — United 
States  a  Foreign  Corpora- 
tion— is  taxable  as  a  Bene- 
ficiary. 

Foreign  Religious  and  Charita- 
ble Corporations — ^Faet  of 
Holding  Property  in  Taxing 
State  Immaterial. 


439. 


440. 


441.  Exemptions  —  Foreign  Charity 

with  Branch  in  Taxing 
State. 

442.  Charitable    Bequests  —  When 

Bequest  to  Local  Branch  of 
a  Foreign  Corporation  is  Ex- 
empt. 

443.  Charitable   Bequest  s — ^Law 

Construed  to  Favor  Exemp- 
tion. 

444.  Educational     in     Part — When 

one  of  the  Purposes  of  Cor- 
poration is  Educational. 

445.  Exemption — Municipal    Corpo- 

ration not  Exempt. 

446.  Bequest  for  saying  Mass  is  a 

Charitable  Bequest  and  Ex- 
empt from  Taxation. 

447.  Foreign  Corporation — Property 

Within  the  Taxing  State. 

448.  Young  Men's  Christian  Asso- 

ciation— ^when  Exempt. 


433.  Section  Twenty-eight.  Wlien  the  beneficial 
interests  of  any  property  or  income  there- 
from shall  pass  to  or  for  the  use  of  any 
hospital,  religious,  educational,  bible,  mis- 
sionary, tract,  scientific,  benevolent  or 
charitable  purpose,  or  to  any  trustee, 
bishop  or  minister  of  any  church  or  reli- 
gious denomination,  held  and  used  exclu- 
sively for  the  religious,  educational  or 
charitable  uses  and  purposes  of  such 
church  or  religious  denomination,  institu- 
tion or  corporation,  by  grant,  gift,  bequest 
or  otherwise,  the  same  shall  not  be  subject 
to  any  such  duty  or  tax,  but  this  provision 
shall  not  apply  to  any  corporation  w^hich 
has  the  right  to  make  dividends  or  distrib- 
ute profits  or  assets  among  its  members. 


278 

434.  Exemptions   to  Religions,   Edncational  and 

Benevolent  Institutions —  Amendment   of 
1901— Illinois. 

One  Caldwell  died  June  7th,  A.  D.  1901,  a  resident  of 
the  State  of  Illinois,  and  by  his  will  limited  his  residuary- 
estate  to  the  Provident  Hospital  of  Chicago,  Illinois.  On 
May  10th,  A.  D.  1901,  prior  to  the  death,  the  amendment 
to  the  Inheritance  Tax  Law  of  1895  was  approved.  On 
July  1st,  A.  D.  1901,  said  amendment,  allowing  exemp- 
tions to  charitable,  religious,  educational  and  benevo- 
lent institutions  went  into  effect.  It  was  contended  that 
the  amendment  precluded  the  County  Judge  from  enter- 
taining proceedings  for  the  collection  of  a  tax  upon  the 
property  passing  to  the  Provident  Hospital,  on  the 
ground  that  the  appraisement  was  not  instituted  until 
after  the  amendment  took  effect.    The  Court  held: 

'^It  is  not  denied  that  upon  the  death  of  Dr.  Cald- 
well, June  7th,  A.  D.  1901,  the  property  bequeathed 
became  immediately  impressed  with  the  liability  to 
tax  under  the  Act  of  1895,  but  it  is  said  that  on  the 
first  day  of  July,  the  property  came  under  the  op- 
eration of  this  amendment  which  declares  it  shall  not 
be  subject  to  any  such  duty  or  tax.  This  position 
however  plausible  is,  we  think,  unsound.  By  the 
provisions  of  the  original  Act  the  tax  in  question 
became  due  and  payable  at  the  death  of  the  testator 
and  was  a  lien  upon  the  property  bequeathed  to  ap- 
pellant from  that  date.  The  right  of  the  State  to 
collect  it  was  then  complete.  The  amendment  has 
no  retroactive  effect."  Provident  Hospital  v.  Peo- 
ple, 198  111.  495. 

435.  Foreign  Edncational  Corporation  Taxable- 

Amendment  1901  Constitutional. 

The  Supreme  Court  of  Illinois  in  considering  the  taxa- 
bility of  a  foreign  educational  corporation,  said: 

**  Fannie  Speed,  deceased,  late  a  citizen  and  resi- 
dent of  the  State  of  Kentucky,  by  her  last  will  and 


279 

testament  devised  certain  real  estate  in  the  City  of 
Chicago  to  the  Board  of  Education  of  the  Kentucky 
Annual  Conference  of  the  Methodist  Episcopal 
Church,  a  corporation  organized  and  existing  by 
virtue  of  the  laws  of  the  State  of  Kentucky,  with 
power  to  form  an  educational  fund,  to  be  styled  the 
*  Centenary  Educational  Fund'  for  the  promotion  of 
literature,  education,  art,  morality  and  religion  with- 
in the  bounds  of  said  conference,  to  be  held  and  used 
exclusively  for  education  and  religious  purposes  in 
the  State  of  Kentucky,  and  it  was  stipulated  that 
said  corporation  is  not  permitted  to  make  dividends 
or  distribution  of  profits  or  assets  among  its  mem- 
bers or  stockholders,  and  that  said  corporation  does 
not  have  or  maintain  an  office  in  the  State  of  Dli- 
nois  or  engage  in  educational  or  religious  work  there- 
in. The  County  Court  of  Cook  County  ruled  that 
under  the  provisions  of  *An  Act  to  Tax  Gifts,  Lega- 
cies and  Inheritances  in  certain  cases,  and  to  pro- 
vide for  the  collection  of  same^  approved  June  15, 
1895,  and  the  act  amendatory  thereof  approved 
May  10,  1901,  said  Board  of  Education  was  liable  to 
pay  the  sum  of  $6,280.50  as  a  succession  or  inheri- 
tance tax  on  the  right  to  take  the  property  under 
said  devise.  This  appeal  questions  the  correctness 
of  that  ruling. 

The  amendatory  Act  of  1901  was  adopted  for  the 
purpose  of  relieving  certain  bequests,  devises  or 
gifts  from  the  operation  of  the  original  Act  of  1895. 

There  is  nothing  in  this  amendatory  act  to  indi- 
cate that  it  was  the  Legislative  intent  that  its  pro- 
visions should  apply  to  corporations  created  under 
the  laws  of  a  sister  state.  It  is  a  universally  ac- 
cepted rule  of  construction  that  an  act  of  the  Gen- 
eral Assembly  of  a  State  granting  powers,  privi- 
leges or  immunities  to  corporations  must  be  held  to 
applj  only  to  corporations  created  under  the  au- 
thority of  that  state  over  which  such  state  has  the 
power  of  visitation  and  control,  unless  the  intent 
that  the  Act  shall  apply  to  other  than  domestic  cor- 
porations is  plainly  expressed  in  the  terms  of  the 
act.  Dos  Pass  OS  on  Inheritance  Tax  Law  (2nd  Ed). 
Sec.  36;  People  v.  Western  Seaman's  Friend  Soci- 


280 

ety,  87  111.  246;  Bailie's  Estate,  38  N.  E.  Rep.  1007; 
Humphrey  v.  State,  70  id,  957. 

The  appellant  board  contends  that  the  amendatory 
act  of  1901,  if  construed  as  having  operation  only 
to  exempt  corporations  organized  under  the  laws 
of  the  State  of  Illinois,  is  inconsistent  with  the  prin- 
ciples of  taxation  established  by  Sections  1  and  2 
of  article  9  of  the  constitution  of  the  State  of  Illi- 
nois. Section  1  of  article  9  of  the  constitution  of 
1870  has  reference  only  to  general  taxation,  and  it 
is  conceded  in  no  manner  restricts  the  power  of  the 
General  Assembly  to  lay  a  tax  upon  the  right  to 
succeed  to  the  title  to  property  within  the  State  by 
inheritance  tax  from  a  deceased  owner  of  such  prop- 
erty or  by  devises  and  bequests  to  be  found  in  a 
will  of  such  deceased  owner.  It  is,  however,  con- 
tended that  Section  1  establishes  the  principle  that 
all  taxation  shall  be  uniform  as  to  the  class  upon 
which  it  operates ;  that  Section  2  of  article  9  limits 
the  power  of  the  General  Assembly,  when  enacting 
statutes  providing  for  the  taxation  of  other  objects 
or  subjects  than  such  as  are  referred  to  in  Section  1, 
to  the  extent  of  requiring  that  the  principles  of  taxa- 
tion established  by  said  Section  1  shall  be  uniform  as 
to  the  class  upon  which  it  operates.  The  argument 
further  is:  *  Uniformity  of  taxation,  as  extending 
to  persons  or  property  in  the  same  class,  implies, 
necessarily,  uniformity  of  exemption  as  to  these 
same  persons  or  property.  Lack  of  uniformity  in 
the  latter  respect  would  be  destructive  of  the  form- 
er ^  and  it  is  urged  in  the  same  behalf  that  under  the 
construction  given  to  the  amendatory  section  of  the 
inheritance  law,  property  devoted  to  educational,  re- 
ligious or  charitable  purposes  is  to  be  subjected  to 
the  inheritance  or  succession  tax  if  the  corporation 
selected  to  administer  the  trust  is  one  organized 
under  the  laws  of  another  state  than  that  of  Illi- 
nois, and  that  property  devoted  to  the  same  purposes 
shall  be  relieved  of  the  tax  if  committed  to  the  ad- 
ministration of  a  corporation  created  under  the  laws 
of  the  State  of  Illinois. 

Inheritance  or  succession  taxes  are  not  laid  on 
the  property  inherited  or  taken  by  devise  or  be- 


281 

quest,  but  on  the  right  to  inherit  or  to  take  such 
property.  The  right  to  take  property  in  pursuance 
of  the  Statute  of  descent  or  of  the  Statute  pertaining 
to  wills  is  property,  but  only  for  the  reason  that  the 
law-making  body  of  the  State  has  seen  fit  to  cre- 
ate the  right  to  so  take  by  inheritance  or  by  devise 
or  bequest.  No  person  or  corporation  can  inherit 
property  or  can  take  by  devise  or  bequest  except 
when  authorized  so  to  do  by  an  Act  of  the  Legis- 
lature. Such  right  may  at  any  time,  be  abrogated 
prospectively,  at  the  will  of  the  Legislature;  or, 
in  the  exercise  of  the  same  power  in  quahty  though 
lesser  in  degree,  the  law-making  department  of  the 
State  may  modify,  regulate  or  impose  conditions 
on  the  right  to  succeed  by  inheritance  or  devise  to 
the  property  which  was  owned  by  a  person  who 
has  died.  Thus,  the  power  of  the  Legislature 
to  lay  a  tax  on  the  right  of  any  person  or  corpora- 
tion to  take  property  by  inheritance  or  by  devise 
or  bequest  is  found  to  be  clear  and  undoubted. 
In  laying  such  a  tax  the  Legislature  may  consider 
the  relation  which  the  person  or  corporation  given 
the  right  of  succession  sustains  to  the  deceased, 
to  the  property  or  to  the  State,  and  may  regulate 
the  amount  of  the  tax  to  be  required  in  view 
of  such  relation,  and  in  exercising  this  power  may 
lay  a  tax  on  the  right  of  one  class  of  persons  or 
corporations  to  take  and  may  deem  it  wise  to  im- 
pose no  tax  upon  the  right  of  other  classes  of  per- 
sons or  corporations  to  take. 

A  clear  distinction  exists  between  domestic  cor- 
porations and  corporations  organized  under  the 
laws  of  other  states.  Such  corporations  fall  nat- 
urally into  their  respective  classes.  Over  the  one — 
that  which  the  State  has  created — the  State  has  cer- 
tain powers  of  control,  and  the  other  is  beyond  its 
jurisdiction.  Those  of  its  own  creation  have  been 
endowed  with  corporate  powers  for  the  purpose  of 
subserving  the  interests  of  the  State  and  its  people; 
those  which  have  been  given  life  by  the  laws  of  a 
sister  state  have  entirely  different  ends  and  objects 
to  accomplish.     The  law-making  power  would  find 


282 

many  weighty  considerations  authorizing  the  classi- 
fication of  foreign  and  domestic  corporations  into 
different  classes,  and  justifying  the  creation  of  lia- 
bility on  the  part  of  foreign  corporations  to  pay  a 
tax  on  the  right  to  take  property  by  descent,  devise, 
or  bequest,  under  the  laws  of  the  Sate,  and  at  the 
same  time  leaving  the  right  of  a  domestic  corpora- 
tion so  to  take,  free  of  any  exaction  *\  Estate  of 
Speed,  216  111.  23;  aff'd  203  U.  S.  553. 

436.  Charity— Definition. 

The  Illinois  Supreme  Court  has  defined  a  charity  in 

Crerar  v.  Williams,  145  111.  625,  as  follows : 

^*A  charity,  in  a  legal  sense,  may  be  more  fully 
defined  as  a  gift,  to  be  applied  consistently  with  ex- 
isting laws,  for  the  benefit  of  an  indefinite  number  of 
persons,  either  by  bringing  their  hearts  under  the 
influence  of  education  or  religion,  by  relieving  their 
bodies  from  disease,  suffering  or  constraint,  by  as- 
sisting them  to  establish  themselves  for  life,  or  by 
erecting  or  maintaining  public  buildings  or  works  or 
otherwise  lessening  the  burthens  of  government.  It 
is  immaterial  whether  the  purpose  is  called  charita- 
ble in  the  gift  itself,  if  it  is  so  described  as  to  show 
that  it  is  charitable  in  its  nature''. 

437.  Public    Charity— Statue    of    a    Horse    with 

Drinking  Fountain. 

In  re  Estate  of  Graves,  242  111.  24,  questions  arose  on 

the  taxability  of  a  bequest  in  the  fourth  clause  of  the 

will  which  reads  as  follows: 

**It  is  my  will  and  I  hereby  direct  my  executors 
to  obtain  from  the  Board  of  South  Park  Commission- 
ers of  the  City  of  Chicago  the  privilege  and  right  to 
erect  on  the  north  side  of  Fifty-fifth  Street  Boule- 
vard, at  a  point  opposite  the  present  driveway  or 
trotting  place  for  horses  in  said  park,  a  drinking 
fountain  or  drinking  basin  for  horses,  and  in  con- 
nection with  and  in  addition  thereto  a  monument, 
which  shall  consist  of  a  lifesize  bronze  statue  of  a 


283 

horse  named  ^Ike  Cook'  the  first  horse  to  trot  in  2 :  30 
over  a  mile  track  in  the  State  of  Illinois  for  a  wager 
of  $2,000,  $1,000  a  side,  in  the  year  1856,  over  the 
Garden  City  race  track,  and  to  inscribe  or  carve  on 
said  monument  and  fountain,  in  a  conspicuous  place, 
my  name  as  the  person  erecting  said  monument,  the 
name  of  said  horse  and  the  time  or  record  of  speed 
of  said  horse  made  over  said  Garden  City  race  track 
in  1856,  as  follows,  viz:  ^Donated  and  erected  by 
Henry  Graves ;  Ike  Cook  trotted  in  2 :  30  in  1856  over 
the  Garden  City  race  track,  located  about  eighty 
rods  from  this  spot  in  the  direction  in  which  he  is 
looking' — said  horse  to  be  looking  east  when  erected, 
in  the  direction  of  said  race  track.  And  my  said  ex- 
ecutors are  hereby  directed  to  expend  for  such  last 
named  monument  and  drinking  fountain,  out  of  my 
estate,  the  sum  of  Forty  Thousand  Dollars  ($40,- 
000.00).  Said  South  Park  Commissioners  to  main- 
tain and  keep  in  good  repair  said  monument  and 
drinking  fountain,  free  of  expense  to  my  estate.  (Al- 
tered by  codicil  to  not  exceed  $40,000.00,  executors 
deciding  to  expend  $30,000.00). 

Held,  a  charitable  and  benevolent  bequest  and  is  ex- 
empt under  Section  2^,  Law  1895. 

438.     Religious     Corporation  —  Wlien     Organized 
Under  Laws  of  Foreign  State. 

The  Transfer  Tax  Law  of  New  York,  1892,  exempting 
religious  corporations  from  tax  cannot  be  extended  to 
exempt  a  foreign  religious  corporation  from  taxation. 
**A  statute  of  a  State  granting  powers  and  privileges 
io  corporations  must,  in  the  absence  of  plain  indications 
io  the  contrary,  be  held  to  apply  only  to  corporations  cre- 
ated by  the  State  and  over  which  it  has  the  power  of 
Tisitation  and  control.  The  Legislature  in  such  cases  is 
dealing  with  its  own  creatures,  whose  rights  and  obli- 
gations it  may  limit,  define  and  control. ''  Matter  of 
Balleis,  144  N.  Y.  132. 


284 

439.  Foreign  Corporations— United  States  a  For- 

eign Corporation— Is  Taxable  as  a  Benefi- 
ciary. 

The  United  States  was  the  legatee  of  property  under 
the  will  of  a  decedent  who  died  January  SQth,  1889.  A 
tax  was  assessed  in  February,  1893,  at  which  time,  chap- 
ter 399,  Laws  1892,  was  in  force.  The  Court  held,  that 
the  United  States  ^ '  is  a  government  and  body  politic  and 
corporate  ordained  and  established  by  the  American  peo- 
ple acting  through  the  sovereignty  of  all  of  the  States*', 
and  is  a  foreign  corporation  within  the  meaning  of  the 
Inheritance  Tax  Law  in  force  at  the  time  of  decedent's 
death  and  taxable  on  the  legacy.  Matter  of  Merriam,  141 
N.  Y.  479;  Matter  of  Cullom,  145  N.  Y.  593. 

440.  Foreign  Religious  and  Charitable  Corpora- 

tions:    Fact  of  Holding  Property  in  Tax- 
ing State  Immaterial. 

Testator  died  April  7th,  1891,  a  resident  of  the  State 
of  New  York,  and  by  his  will  bequeathed  property  to, 
among  others,  two  foreign  corporations,  viz:  Presbyte- 
rian Board  of  Eelief  for  Disabled  Ministers,  a  Pennsyl- 
vania corporation,  and  The  American  Board  of  Commis- 
sioners for  Foreign  Missions,  a  Massachusetts  corpora- 
tion. It  was  urged  that  the  latter  corporation,  having 
the  right  to  hold  real  and  personal  property  in  New 
York,  relieved  it  from  taxation.  The  Court  held,  that 
the  foreign  corporations  were  not  within  the  exemptions 
referred  to  in  the  Inheritance  Tax  Law,  and  said: 

^^Upon  the  view  we  have  taken  the  act,  chap.  376, 
of  the  Laws  of  1877,  conferring  upon  the  defendant. 
The  American  Board  of  Commissioners  for  Foreign 
Missions,  a  limited  privilege  of  taking  and  holding 
real  and  personal  property  in  this  State,  does  not 
relieve  that  corporation  from  a  legacy  duty.  That 
was  an  enabling  statute  merely.     The  corporation 


285 

remained  a  foreign  corporation  as  before,  but  pos- 
sessing in  this  State  a  privilege  granted  by  that 
statute^'.  Estate  of  Prime,  136  N.  Y.  347;  Roth- 
child's  estate,  71  N.  J.  Eq.  210. 

441.     Exemptions— Foreign  Charity  -with  Braneli 
in  Taxing  State. 

The  Western  Seaman's  Friend  Society,  a  corporation 
organized  under  the  laws  of  the  State  of  Ohio,  established 
a'  branch  in  Chicago;  acquired  property  and  erected 
buildings  thereon  in  said  city.  It  claimed  exemption 
from  taxation  in  Illinois  on  this  property  under  the  Illi- 
nois Revenue  Act  of  1872,  which,  among  other  things, 
provided  that  **all  property  of  institutions  of  purely 
public  charity,  when  actually  and  exclusively  used  for 
such  charitable  purposes,  not  leased  or  otherwise  used 
with  a  view  to  profit'',  should  be  exempt  from  taxation. 
The  Court  said: 

**But  if  a  broader  construction  could  be  given  to 
the  statute,  and  it  could  be  held  to  embrace  all  insti- 
tutions that  dispense  charity,  whether  public  or  pri- 
vate, and  the  property  used  exclusively  for  that  pur- 
pose, there  is  still  a  valid  reason  why  the  property  in 
this  case  is  not  exempt  from  its  just  proportion  of 
taxation.  The  statute  must,  in  any  event,  be  under- 
stood to  have  exclusive  reference  to  institutions  or 
corporations  created  by  the  laws  of  this  State,  and 
not  to  foreign  corporations  that  may  choose  to  locate 
branches  in  this  State.  It  is  only  by  that  comity 
that  exists  between  states  that  foreign  corporations 
are  permitted  to  transact  in  this  State,  the  business 
for  which  they  were  created.  The  General  Assembly 
has  manifested  no  intention  to  relieve  the  property 
situated  in  this  State;  belonging  to  such  corpora- 
tions, no  matter  what  their  objects  may  be,  whether 
charitable  or  otherwise,  from  the  burdens  of  taxa- 
tion, even  if  it  possesses  the  power  under  the  con- 
stitution to  do  so. 

In  any  view  that  can  be  taken,  the  property  as- 


286 

sessed  is  liable  to  taxation  under  the  revenue  laws 
of  the  State,  and  the  judgment  will  be  reversed  and 
the  cause  remanded''.  People  v.  Western  Seaman's 
Friend  Society,  87  HI.  246. 

442.  Charitable  Bequests — When  Bequest  to  Lo- 

cal Branch  of  a  Foreign  Corporation  Is  Ex- 
empt. 

A  legacy  of  $2,000.00  was  bequeathed  to  the  Burlington 
Branch  of  the  Salvation  Army  (meaning  Burlington, 
Iowa).  The  Salvation  Army  is  organized  under  the  laws 
of  the  State  of  New  York,  but  maintained  a  branch  at 
Burlington,  Iowa,  which  had  no  charter  powers  in  the 
latter  State.  The  Court  held,  the  rule  that  the  local 
statute  covers  only  local  domestic  organizations  is  in- 
applicable where  the  bequest  is  made  to  a  local  branch 
to  be  used  within  the  State  of  Iowa.  Re  Crawford's  Es- 
tate, 126  N.  W.  (Iowa)  774. 

443.  Charitable  Bequests — ^Law  Construed  to  Fa- 

vor Exemption. 

Liberal  construction  should  be  given  in  favor  of  charit- 
able institutions  taking  under  the  tax  law.  Re  Spangler's 
Estate,  (Iowa)  127  N.  W.  625. 

444.  Educational  in  Part — When  One  of  the  Fur-* 

poses  of  Corporation  Is  Educational. 

The  Metropolitan  Museum  of  Art  was  incorporated  by 
a  special  act  of  the  Legislature  (Chap.  197,  L.  1870)  ^^for 
the  purpose  of  establishing  and  maintaining  in  said  city 
(New  York),  a  museum  and  library  of  art,  of  encourag- 
ing and  developing  the  study  of  the  fine  arts,  and  the  ap- 
plication of  arts  to  manufacture  and  practical  life,  of  ad- 
vancing the  general  knowledge  of  kindred  subjects,  and 
to  that  end,  of  furnishing  popular  instruction  and  recrea- 
tion''.   This  corporation  took  a  legacy  of  $1,000.00  by 


287 

the  will  of  a  decedent  who  died  a  resident  of  the  State 
of  New  York.  By  an  arrangement  with  the  City  of  New 
York  *^all  professors  and  teachers  of  the  public  schools 
of  that  city,  or  other  institutions  of  learning  in  said  city, 
in  which  instruction  is  given  free  of  charge  shall  be  ad- 
mitted to  all  advantages  afforded  by  the  corporation''. 
Held,  that  the  legacy  was  bequeathed  for  **  educational' ' 
purposes,  and  that  said  corporation  is  in  part  an  educa- 
tional corporation.  Matter  of  Mergentime,  129  App. 
Div.  (N.  Y.)  367,  aff'd  195  N.  Y.  no  opinion. 

445.  Exemption — Municipal  Corporation  Not  Ex- 

empt. 

A  bequest  to  the  City  of  New  York  for  the  purpose  of 
providing  an  ornamental  fountain  to  be  placed  in  one  of 
the  streets  or  public  places  in  the  city  is  taxable  and  is  not 
exempt  from  taxation  under  the  Collateral  Inheritance 
Tax  Law  of  1887  on  the  ground  that  the  city  of  New  York 
is  exempt  by  general  law.  Matter  of  Hamilton^  148  N.  Y. 
310. 

446.  Bequest  for  Saying  Mass  Is  a  Charitable  Be- 

quest and  Exempt  from  Taxation. 

A  transfer  of  property,  real  or  personal,  in  trust  to  seU 
the  same  and  expend  the  proceeds  of  said  sale  in  saying 
masses  for  the  repose  of  the  soul  and  souls  of  a  deceased 
wife,  mother-in-law  and  brother-in-law  of  deceased,  and 
for  the  deceased  father,  mother  and  sister  of  the  de- 
ceased, held  to  be  a  charitable  bequest  under  the  laws 
of  the  State  of  Illinois.  Hoeffer  v.  Clogan,  171  Bl.  462. 
The  Court  said  on  this  subject: 

*^The  doctrine  of  charitable  uses  has  been  repeat- 
edly held  to  be  a  part  of  the  law  of  this  State.  The 
equitable  jurisdiction  over  such  trusts  was  not  de- 
rived from  the  statute  of  charitable  uses  (43  Eliz. 


288 

Cliap.  4),  but  prior  to  and  independently  of  that 
statute  charities  were  sustained  irrespective  of  in- 
definiteness  of  the  beneficiaries  or  the  lack  of  trus- 
tees or  the  fact  that  the  trustees  appointed  were  not 
competent  to  take.  (Heuser  v.  Harris,  42  111.  425). 
The  statute,  however,  became  a  part  of  the  common 
law  of  this  state. 

The  statute  of  charitable  uses  of  Elizabeth  has, 
since  its  passage,  been  considered  as  showing  the 
general  spirit  and  intent  of  the  term  *  charitable' 
and  the  objects  which  come  within  such  general 
spirit  and  intendment  are  to  be  so  regarded.  The 
definition  given  by  Mr.  Justice  Gray  in  the  case  of 
Jackson  v.  Phillips,  14  Allen  56,  was  adopted  and 
approved  by  this  Court  in  the  case  of  Crerar  v.  Wil- 
liams, 145  111.  625  *  *  *.  Any  trust  coming  with- 
in this  definition  for  the  benefit  of  an  indefinite  class 
of  persons  sufiiciently  designated  to  indicate  the  in- 
tention of  the  donor  and  constituting  some  portion 
or  class  of  the  public  is  a  charitable  trust.  Among 
such  objects  are  the  support  and  propagation  of 
religion  and  the  maintenance  of  religious  services, 
to  pay  the  expense  of  preaching  and  salary  of  rec- 
tors or  the  preaching  of  an  annual  sermon  in  mem- 
ory of  the  testator.  {Duror  v.  Motteux,  1  Ves.  Sr. 
320).  The  doctrine  of  superstitious  uses  arising 
from  the  statute  1  Edward  VII,  chap.  14,  under 
which  devises  for  procuring  masses  were  held  to  be 
void,  is  of  no  force  in  this  State,  and  has  never  ob- 
tained in  the  United  States.  In  this  country  there 
is  absolute  religious  equality  and  no  discrimination 
in  law  is  made  between  different  religious  creeds  or 
forms  of  worship.  The  nature  of  the  mass,  like 
preaching,  prayer,  the  communion  and  other  forms 
of  worship,  is  well  understood.  *  *  *  It  is  a  pub- 
lic and  external  form  of  worship,  a  ceremonial  which 
constitutes  a  visible  action.  *  *  *  A  bequest  for 
such  special  purpose  merely  adds  a  particular  re- 
membrance to  the  mass,  and  does  not,  in  our  opinion, 
change  the  character  of  the  religious  service  and 
render  it  a  mere  private  benefit.  An  act  of  public 
worship  would  certainly  not  be  deprived  of  that 
character  because  it  was  also  a  special  memorial  of 


289 

some  person,  or  because  special  prayers  should  be 
included  in  the  services  for  particular  persons.  Me- 
morial services  are  often  held  in  churches,  but  they 
are  not  less  public  acts  of  worship  because  of  their 
memorial  character.  The  masses  said  in  the  Holy 
Family  Church  were  public  and  the  presumption 
would  be  that  the  public  would  be  admitted,  the  same 
as  at  any  other  act  of  worship  of  any  other  christian 
sect.  The  bequest  is  not  only  for  an  act  of  religious 
worship,  but  it  is  an  aid  to  the  support  of  the  clergy. 
Although  the  money  paid  is  not  regarded  as  a  pur- 
chase of  the  mass,  yet  it  is  retained  by  the  clergy, 
and,  of  course,  aids  in  the  maintenance  of  the  priest- 
hood. We  think  the  devise  and  legacy  charitable 
and  a  rule  applicable  to  trusts  is  that  they  will  not 
be  allowed  to  fail  for  want  of  a  competent  trustee. 
The  court  will  appoint  a  trustee  or  trustees  to  take 
the  gifts  and  apply  them  to  the  purposes  of  the 
trust''. 

447.     Foreign  Corporation— Property  Within  the 
Taxing  State. 

On  the  question  whether  personal  property  within  the 
State  of  New  York  owned  by  a  corporation  organized 
without  that  State  was  taxable,  the  Court  held:  Citing 
Matter  of  Prime,  136  N.  Y.  347,  **  Bearing  in  mind  the 
rule  that  the  burden  of  proving  exemption  is  upon  the 
party  asserting  it,  can  it  be  said  that  it  was  the  legisla- 
tive intent  to  exempt  from  taxation  the  personal  property 
within  this  State  of  a  non-resident  or  foreign  educational 
corporation,  as  well  as  that  of  a  domestic  corporation? 
Strangely  indeed  we  look  in  vain  for  an  authoritative  de- 
cision by  the  Courts  of  our  State  directly  upon  the  ques- 
tion, unless  it  be  in  the  Matter  of  Prime  (supra) '\  in 
which  it  was  held  that  a  foreign  corporation  was  taxable. 
^*  While  in  the  case  cited  the  bequest  was  to  a  Board  of 
Foreign  Missions,  rather  than  to  a  corporation  of  an- 
other State  and  the  decision  related  to  the  liability  for 


290 

Inheritance  tax  rather  than  of  a  general  tax,  yet  I  cannot 
see  why  the  reasoning  of  the  decision  is  not  at  least 
equally  applicable  to  the  case  at  bar  *  *  *.  The  Su- 
preme Court  of  Illinois  in  the  case  of  People  v.  Seaman's 
Friend  Society,  87  111.  246,  held  that  a  statute  of  that 
State  exempting  from  taxation  all  property  of  institu- 
tions of  public  charity  must  be  understood  to  have  ex- 
clusive reference  to  institutions  or  corporations  created 
by  the  laws  of  the  State  of  Illinois  and  not  to  foreign 
corporations,  and  hence  that  a  charitable  institution  of 
the  State  of  Ohio,  was  not  exempt  from  taxation  for 
property  situated  within  the  State  of  Illinois."  People 
V.  Cameron,  124  N.  Y.  S.  949. 

448.     Young  Men's  Christian  Association — ^When 
Exempt. 

A  bequest  to  the  Y.  M.  C.  A.  and  a  bequest  to  the  Y. 
W.  C.  A.  is  exempt  from  taxation  under  the  Transfer 
Tax  Law  of  New  York,  as  both  institutions  are  broadly 
educational  in  their  character.  Re  Moses,  123  N.  Y.  S^ 
443. 


291 


CHAPTER  XXVII. 

Certified  Copy  of  Papees — Eepeax.. 


449.  Section  Twenty-nine. 

450.  Section  Thirty. 

451.  Section  Thirty-one. 

452.  Amendatory  Act  Does  Not  Be- 

lieve Previously  vested  In- 
terests. 


453.  Statutes  —  "When  Eevision 

Amounts  to  Continuation  of 
the  Act  Superseded. 

454.  New     Enactment     Embodying 

the  same  Principle  of  Law 
Eepealed. 


449.  Section  Twenty-nine.  When  property  or  any 
interest  therein  or  income  therefrom,  shall 
pass  to  or  for  the  use  of  any  person,  insti- 
tution or  corporation  by  the  death  of  an- 
other, by  deed,  instrument  or  memoranda, 
such  passing  shall  be  deemed  a  transfer 
-within  the  meaning  of  this  act,  and  tax- 
able at  the  same  rates,  and  be  appraised  in 
the  same  manner  and  subjected  to  the  same 
duties  and  liabilities  as  any  other  form  of 
transfer  provided  in  this  act. 


450.  Section  Thirty.  On  the  written  request  of 
the  County  Treasurer  or  county  judge,  in 
the  county  wherein  an  appraisement  has 
been  initiated,  the  clerk  of  the  County 
Court  and  in  counties  having  a  Probate 
Court,  the  clerk  of  the  Probate  Court  and 
the  recorder  of  deeds  shall  furnish  certi- 
fied copies  of  all  papers  w^ithin  their  care 
or  custody,  or  records  material  in  the  par- 
ticular appraisement,  and  the  said  clerk 
and  recorder  shall  receive  the  same  fee  or 
compensation  for  such  certified  copies  as 
they  ivould  be  entitled  by  law  in  other 
cases,  "which  shall  be  paid  to  them  by  the 
County  Treasurer  of  the  proper  county,  out 
of  moneys  in  his  hands  on  account  of  in- 
heritance tax  collections,  on  the  presenta- 
tion of  itemized  bills  therefor,  approved  by 
the  county  judge  of  the  proper  county. 


292 

451.  Section  Thirty-one.      Tliat  ^'An  Act  to  tax 

gifts,  legacies,  and  inheritances  in  certain 
cases,  and  to  provide  for  the  collection  of 
the  same,"  approved  June  15,  1895,  in  force 
July  1,  1895,  as  amended  by  act  approved 
May  10,  1901,  in  force  July  1,  1901,  and 
all  laws  or  parts  of  laivs  inconsistent  here- 
with be  and  the  same  are  hereby  repealed: 
Provided,  hoivever,  that  such  repeal  shall 
in  no  wise  affect  any  suit,  prosecution  or 
court  proceeding  pending  at  the  time  this 
act  shall  take  effect,  or  any  right  ivhich 
the  State  of  Illinois  may  have  at  the  time 
of  taking  effect  of  this  act,  to  claim  a  tax 
upon  any  property  under  the  provisions  of 
the  act  or  acts  hereby  repealed,  for  xirhich 
no  proceeding  has  been  commenced:  and  all 
appeals  and  rights  of  appeal  in  all  suits 
pending,  or  appeals  from  assessments  of 
tax  made  by  appraisers'  reports,  orders  fix- 
ing tax  or  otherwise  existing  in  this  state 
at  the  time  of  the  taking  effect  of  this  act. 

452.  Amendatory  Act  Does  Not  Relieve  Previously 

Vested  Interests. 

^^The  rule  is  considered  settled  in  this  State  that 
neither  original  statutes  nor  amendments  have  any 
retroactive  force  unless  in  exceptional  cas.es  the 
Legislature  so  declares.**  Matter  of  Miller,  110  N. 
Y.  216. 

453.  Statutes — When  Revision  Amounts  to  Con- 

tinuation of  the  Act  Superseded. 

^^In  Hemvie  v.  N.  Y.  C.  S  H.  R.  R.  R,  Co.  (154 
N.  Y.  281)  it  was  held:  The  rule  in  the  case  of  a 
revision  of  statutes  is  that  where  the  law,  as  it  pre- 
viously stood,  was  settled  either  by  adjudication  or 
by  frequent  application  of  the  statute  without  ques- 
tion, a  mere  change  in  the  phraseology  is  not  to  be 
construed  as.  a  change  in  the  law,  unless  the  purpose 
of  the  Legislature  to  work  a  change  is  clear  and  ob- 


293 

vious.  Therefore,  because  Section  242  prescribes 
that  ^all  property'  shall  be  subject  to  the  transfer 
tax  and  because  of  the  revision  of  the  statute  should 
not  be  held  to  work  a  change  in  the  settled  law  un- 
less the  legislative  intent  to  that  effect  is  clearly 
manifest,  we  are  of  opinion  that  the  seat  held  by  the 
testator  was  subject  to  the  tax  imposed  upon  if 
Matter  of  Hellman,  174  N.  Y.  254,  reversing  77  App. 
Div.  (N.  Y.)  355. 

454.     New  Enactment  Embodying  the  Same  FHn- 
ciple  of  Laiv  Repealed. 

*  *  There  are  two  questions  in  the  case,  one  of  which 
is  common  to  all  the  appellants,  and  one  which  per- 
tains to  the  two  corporations  alone.  The  general 
question  is  presented  by  the  claim  on  the  part  of  the 
appellants,  that  the  only  statute  in  force  at  the  time 
of  the  institution  of  proceedings  for  assessing  the 
tax,  in  June,  1891,  imposing  a  legacy  tax,  was  the 
act  chapter  215  of  the  Laws,  of  1891,  which  amended 
the  first  section  of  the  Act  of  1885,  as  amended  by 
the  act  of  1887,  by  declaring  that  said  first  section 
was  amended  *to  read  as  follows',  and  then  pro- 
ceeded to  recite  the  first  section  as  amended.  The 
act  of  1891  did  not,  in  terms  repeal  the  correspond- 
ing section  in  the  former  acts.  The  section,  as 
amended,  embodied  the  same  principle  in  respect  to 
the  taxation  of  what,  for  brevity,  may  be  called  col- 
lateral inheritances,  as.  did  the  corresponding  sec- 
.tion  in  the  former  acts,  and  made  no  change  in  the 
rate,  but  in  prescribing  the  rule  it  does  not  follow 
the  exact  language  of  the  prior  acts. 

The  claim,  as  we  understand  it,  is  that  a  statute 
which  amends  a  prior  statute  in  some  particulars 
under  the  formula,  *so  as  to  read  as  follows',  oper- 
ates as  a  repeal  of  the  whole  prior  statute,  unless, 
provisions  intended  to  be  retained  are  incorporated 
in  the  amended  statute  in  the  precise  words  of  the 
former  statute,  without  change  of  phraseology,  and 
that  it  makes  no  difference  although  the  same  provi- 
sion in  substance  is  contained  in  the  amending,  as  in 
the  original  statute,  nor  although  the  transposition 


294 

and  collocation  of  words,  in  the  amending  act  was 
for  the  purpose  of  adjusting  the  new  features 
brought  in  by  the  amendment  so  as  to  make  the  new 
and  the  old  provisions  harmonious  in  their  relation 
and  expression.  Starting  with  this  premise,  it  is 
then  claimed  that  the  first  section  of  the  act  of  1887 
having  been  repealed  by  implication,  without  saving 
to  the  State  the  right  to  proceed  under  the  prior  law 
to  assess  and  collect  the  tax  on  estates,  of  decedents 
who  died  prior  to  the  passage  of  the  Act  of  1891, 
there  was  no  law  when  the  assessment  in  this  case 
was  made  authorizing  such  assessment.  No  assess- 
ment it  is  insisted  could  be  made  at  that  date  under 
the  Law  of  1887,  because  the  first  section  of  that  act 
(the  one  imposing  a  tax)  had  been  repealed  by  the 
Act  of  1891,  before  any  fixed  right  of  the  State  to 
assess  and  tax  the  estate  in  question  had  accrued, 
and  no  assessment  could  be  made  under  the  Act  of 
1891,  because  that  Act  was  prospective  and  applies 
only  to  cases  where  death  occurred  subsequent  to  its 
passage. 

By  this  process  of  reasoning  it  is  sought  to  estab- 
lish that  the  tax  in  this  cas.e  was  unauthorized  and 
although  it  is  admitted  that  if  the  Act  of  1887  had 
remained  in  force,  or,  if  the  decedent  had  died  after 
the  passage  of  the  act  of  1891,  or,  if  the  language  of 
the  first  Section  of  the  Act  of  1887,  as  to  the  taxa- 
tion of  Collateral  Inheritances,  had  been  incorpo- 
rated ipsissimis  verbis  in  the  Act  of  1891,  the  inter- 
ests in  question  would  have  been  taxable,  yet  it  is 
insisted  that  the  right  to  tax  has  been  lost  by  the 
lack  of  verbal  identity  between  the  two  sections.  "We 
think  the  contention  upon  this  point  has  no  support 
in  authority  or  reason.''  Estate  of  Prime,  136  N. 
Y.  347. 


295 


CHAPTER  XXVin. 


Practice  and  Procedure. 


455.  The  General  Subject. 

456.  First    Contact   with   the   Law 

Usually  Arises  out  of  Sec- 
tion  Nine. 

457.  Penalty  for  Non-compliance  is 

Incurred  when? 

458.  State  has  an  Interest  in  every 

Estate. 

459.  First    Question   with   Deposit- 

ary, Corporation,  Association 
or  Bailee  is  Liability. 

460.  Estimation  of  Tax  and  Eeten- 

tion  to  Cover. 

461.  Basis  for  Issuing  Consent — ^in 

General. 
463.  Administration  of  Section  Nine 
— Two  Districts. 

463.  Springfield    District — ^Business 

Transacted  at  Springfield, 
Illinois. 

464.  Book  or  Eecord  Transfers. 

465.  Chicago   District  —  Comprises 

Cook  County.  All  Business 
Transacted  by  Inheritance 
Tax  Attorney  at  Chicago. 
Tangible  Property  or  Evi- 
dences thereof. 

466.  Book  or  Eecord  Transfers. 

467.  Communication  to  Wrong  Dis- 

trict. 

468.  Consent — only  Lifts  Liability 

for  Inheritance  Tax. 

469.  Notice. 

470.  Springfield    District — ^How    to 

Obtain  Consent  to  Transfer 
— Deceased  a  resident  or 
Non-resident   of   Illinois. 

471.  No  Administration. 

472.  Deceased  Eesident  of  Dlinois. 

Administration,  Transfer  of 
Shares  of  Stock  and  Bonds 
on  the  books  of  the  Corpo- 
ration. 

473.  Decedent    a    Non-resident    of 

Illinois — ^Book  Transfer  of 
Stock  or  Registered  bonds. 

474.  Form  Administration  Affidavit 

required  in  Springfield  Dis- 
trict. 


475.  No    Administration    Affidavit. 

Springfield  District. 

476.  Form  ''SS'^  Notice. 

477.  Chicago  District— All  Business 

Transacted  with  Joint  Rep- 
resentative of  Attorney  Gen- 
eral and  State  Treasurer,  at 
Chicago,  Illinois. 

478.  Bank    Deposits  —  Deceased    a 

Eesident  of  Illinois — Admin- 
istration of  Estate  in  Illi- 
nois. 

479.  Transfer— What  Constitutes. 

480.  Administration  Affidavit — Chi- 

cago District. 

481.  Bank  Deposits — Deceased  Ees- 

ident of  Illinois — No  Ad- 
ministration Pending. 

482.  No  Administration  Affidavit — 

Chicago  District. 

483.  Bank     Deposits — Deceased     a 

Non-resident  of  Illinois — 
Administration  or  No  Ad- 
ministration. 

484.  Securities,    Deposits    or    other 

Assets  (other  than  bank  de- 
posits, but  including  collat- 
eral) under  control  or  in 
Possession  of  a  Bank,  Trust 
Company,  Corporation,  Insti- 
tution or  Person — Decedent 
a  Eesident  or  Non-resident 
of  Illinois  —  Administration 
or  No  Administration. 

485.  Eesidence  in  Dlinois — ^Admin- 

istration. 

486.  Eesidence  in  Illinois — ^No  Ad- 

ministration. 

487.  Security. 

488.  Eeports  of  Examiners. 

489.  Non-residents — ^When  Decedent 

is  a  Non-resident  of  Illinois 
and  Eegardless  of  whether 
there  is  or  is  not  Adminis- 
tration of  the  Estate.  Action 
of  the  Tax  Office  on  Eeceipt 
of  Form  ''SS''  Notice. 

490.  Deposit — When  made  Consent 

issues. 


296 


491.  Deposit  Eeturned  if  no  Tax. 

492.  Delay  in  Issuing  Consents. 

493.  Book   Transfers  of  Stock  and 

Eegistered  Bonds — Decedent 
a  Eesident  or  Non-resident — 
Administration  and  no  ad- 
ministration. 

494.  Non-resident     Estates — ^Affida- 

vit required. 

495.  Safe    Deposit    Company — Sto- 

rage Company — Decedent  a 
Eesident  or  Non-resident  of 
Illinois  —  Administration  or 
No    Administration. 

496.  When  Consent  Issues. 

497.  Emergency    Examinations. 

498.  Deposit  System. 

499.  Eecommendation    to   Non-resi- 

dents. 

500.  Affidavit  Answering  Non-resi- 

dent Questions. 
601.  Common   Mistakes   in  Prepar- 
ing Affidavit. 

502.  Delay. 

503.  Section    Eleven.     In    General 

Duty  of  Lawyer.  Investiga- 
tion. Appraisement.  Evi- 
dence. Special  Guardian. 
Appraiser  'a  Eeport.  Order 
of  Tax.  Tax  Eeceipt.  Ap- 
peal to  County  Court.  Ap- 
peal to  Supreme  Court. 

504.  Appraisement     under     Section 

Eleven. 
605.  Legal    representative,    Benefi- 
ciary and  State  '^Interested 
Parties. ' ' 

506.  Appraiser. 

507.  Hearing   E  o  o  m  s  —  Appraise- 

ments had  Therein. 

508.  Hearing     before     Appraiser — 

Non-resident   cases. 

509.  Eesident  cases. 

510.  Close  corporation  stock. 

511.  Eecord  of  Appraisement. 

612.  Objections  to  Appraiser's  Ee- 

port cannot  be  Argued  be- 
fore County  Judge. 

613.  Inventories — Good  Practice  in 

Tax  Matters. 


514.  Description  of  Property  in  In- 

ventories. 

515.  Stocks. 

516.  Bonds. 

517.  Insures  Immediate  Consent  to 

Transfer. 

518.  Appraiser  —  Involuntary    Ap- 

pointment— Investigation  by 
Tax  Office. 

519.  Life  Estates  and  Eemainders 

— How  Value  Determined. 

520.  Value   of   an  Annuity  of  One 

Dollar  on  a  single  life,  Ac- 
cording to  the  Carlisle  Table 
of  Mortality. 

521.  How     to     Ascertain     Present 

Value  of  Annuity  or  Estate 
for  Life — and  Eemainder. 

522.  Valuation    of    Annuity    for    a 

Fixed  Period  of  Years. 

523.  Fixed  Annuity  Table. 

524.  Appeal  to  County  Court. 

525.  Appraiser's    Eeport    Used    as 

Evidence. 

526.  Appeals  to  Supreme  Court. 

527.  Section    Twenty-three. 

528.  Proceeding  to  Quiet  Question 

of  Taxability — in  General. 

529.  The   Other   Section  Providing 

Eemedy  to  Quiet  Question 
of  Taxability. 

530.  Procedure      for      Determining 

Taxability  Under  Section  11. 

531.  Property  "In  this  State." 

532.  Transferred  within  the  Mean- 

ing of  this  Act. 

533.  Interested  Party. 

534.  Petition — Form — Allegations — 

Proof  under  Section  23. 

535.  Description     of     Property     in 

Copy  of  Inventory  made  a 
Part  of  Petition. 

536.  Form  Petition  for  no  Tax. 

537.  Petition  for  No  Tax — Non-res- 

ident Decedent. 

538.  Petition  for  No  Tax— Eelation 

of  Parent  to  Beneficiary. 

539.  Order  of  No  Tax. 

540.  Entry  of  No  Tax  Order. 


297 


PEACTICE  AND  PROCEDURE. 


455.  The  General  Subject. 

Practice  and  procedure  under  the  Inheritance  Tax 
Law  of  Illinois  is,  in  the  main,  a  system  of  unwritten  rules 
fashioned  by  the  novelty  of  questions  arising  from  the 
operation  of  a  special  law  which  has  little  statutory  or 
traditional  method  of  procedure. 

These  rules  have  developed  out  of  experience  and  ex- 
pediency in  securing  regularity  for  the  institution  and 
prosecution  of  appraisements,  or  suits  to  determine  the 
taxability  of  property. 

There  has  also  been  gradually  established  by  the  dif- 
ferent state  and  county  officers  certain  requirements  or 
rules,  for  the  orderly  discharge  of  the  duties  charged  to 
them,  or  the  powers  invested  in  them,  by  the  tax  law. 

Probably  ninety  per  cent,  of  all  transfers  never  reach 
appraisement,  nor  are  they  subjected  to  judicial  proceed- 
ing to  determine  taxability;  but  these  same  transfers 
come  within  the  scope  of  s.ome  section  of  the  law  impos- 
ing a  stricture  or  Hmitation  on  possession  or  title  to 
property,  which  said  state  or  county  officers  are  legally 
empowered  to  relieve. 

All  rules  relating  to  practice  or  procedure,  whether 
established  by  law,  order  of  court  or  custom,  or  exacted 
by  state  or  county  officers,  are  intended  to  be  covered 
under  the  head  of  ^* Practice  and  Procedure.'' 

456.  First  Contact  with  the  Law  Usually  Arises 

Out  of  Section  Nine. 

The  contact  with  the  tax  law  usually  begins  with  Sec- 


298 

tion  9  (L.  1909)*  wMch  prohibits  corporations,  banks, 
trust  companies,  deposit  companies,  institutions''  or 
persons,  in  possession  or  control  of  securities,  deposits 
and  assets  belonging  to  or  standing  in  the  name  of  a  de- 
cedent, resident  or  nonresident  of  the  state,  or  belonging 
to  or  standing  in  the  joint  names  of  such  a  decedent  and 
one  or  more  pers^ons  (and  prohibits  corporations,  banks, 
associations,  etc.,  from  making  book  or  record  transfers 
of  securities)  from  transferring  or  delivering  the  same 
to  executors,  administrators,  survivors  and  other  claim- 
ants without  giving  ten  days '  notice  to  the  Attorney  Gen- 
eral and  State  Treasurer  of  the  time  and  place  of  such 
intended  transfer  or  delivery,  and  without  retaining  a 
sufficient  amount  of  property  to  pay  inheritance  taxes 
and  interest,  unless  the  Attorney  General  and  State 
Treasurer  consent  in  writing  to  such  transfer  or  deliv- 
ery. 

Power  is  given  said  state  officers  to  make  an  examina- 
tion of  the  property  at  the  time  of  the  delivery  or  trans- 
fer. 

457.     Penalty    for     Noncompliance     Is     Incurred 
IVhen? 

A  safe  deposit  company,  trust  company,  bank,  corpo- 
ration, institution  or  person  is  subject  to  a  penalty  of 
one  thousand  dollars,  plus  the  inheritance  taxes  and  in- 
terest : 

(a)  For  failure  to  serve  on  the  Attorney  General  and 
State  Treasurer  notice  of  the  time  and  place  of  the  in- 
tended transfer  or  delivery  of  securities,  deposits  or 
other  assets. 


♦Analysis  of  law  on  pages  159  to  168. 

•1.    Includes  Building  Loan  Associations;  Attorney  General's  opin- 
ion, 1910. 


299 

(b)  For  failure  to  allow  said  state  officers,  or  their 
representatives  to  examine  such  securities,  deposits  or 
other  assets,  at  the  time  of  the  transfer  or  delivery  there- 
of. 

(c)  For  failure  to  retain  (unless  consent  in  writing 
for  the  transfer  or  delivery  is  given  by  the  Attorney 
General  and  State  Treasurer)  a  suffident  portion  or 
amount  to  pay  the  inheritance  tax  and  interest  which 
may  thereafter  be  assessed. 

458.     State  Has  an  Interest  in  Every  Estate. 

In  National  Safe  Deposit  Company  v.  W,  H.  Stead, 

Attorney  General  et  aL,  250  HI.  584,  the  court  held: 

*^It  is  clear,  therefore,  that  the  State  has  an  in- 
terest in  every  estate  that  is  subject  to  the  payment 
of  an  inheritance  tax,  and  in  all  s.uch  proceedings  the 
Attorney  General  or  some  other  designated  officer  is 
the  representative  of  the  State  {People  v.  Sholem, 
238  111.  203).  We  think,  therefore,  that  the  conclu- 
sion, from  what  has  been  said,  logically  and  neces- 
sarily follows  that  where  a  lessee  of  the  appellant 
(safe  deposit  company*)  dies  leaving  property  in 
one  of  the  safety  deposit  boxes  or  safes  of  the  appel- 
lant, the  State,  by  its  proper  representative,  has  the 
right  to  be  advised  whether  or  not  it  shall  ultimately 
be  established  that  it  has  an  interest  in  such  prop- 
erty." 

450.     First  Question  -with  Depositary,  Corporation, 
Association  or  Bailee  Is  Liability. 

When  an  executor,  administrator,  survivor  or  other 
claimant  makes  demand  of  a  corporation,  bank,  trust 
company,  deposit  company,  institution  or  person  who  is 
in  possession  or  control  of  property  affected  by  said  sec- 
tion, the  question  that  first  arises  with  the  corporation, 


•Author's  words. 


300 

bank  or  other  institution,  etc.,  is  usually  a  practical  one 
— ^how  to  transfer  or  deliver  the  property  without  sus- 
taining liability. 

Few  depositaries  or  corporations  have  thus  far  as- 
sumed the  risk  of  estimating  the  tax  and  interest,  and 
withholding,  after  notice  and  examination,  sufficient 
property  to  cover,  as  an  error  in  the  estimate  would  in- 
cur the  penalty  and  liability. 

Therefore  the  safe  deposit  company,  trust  company, 
bank,  corporation,  institution  or  person,  must  primarily 
elect  between  two  courses  of  procedure: 

1st.  The  procedure  according  to  the  rules  of  the  state 
officials  in  which  is  contemplated  the  release  of  the  de- 
positary and  corporation  from  penalty  and  liability  by 
an  official  written  consent  to  transfer  or  deliver.  (The 
release  of  the  property  does  not  lift  the  lien  on  same  for 
the  tax  as  against  legal  representatives  and  beneficiar- 
ies.) 

2nd.  The  procedure  according  to  the  particular  pro- 
visions of  the  law  by  the  s.ervice  of  notice,  examination 
and  retention  of  property  to  cover  the  tax  and  interest 
which  is  independent  of  the  rales  for  granting  consents. 

The  procedure  and  form  notices  hereinafter  outlined 
are  designed  to  cover  only  cases  where  a  consent  to 
transfer  or  deliver  is  desired,  and  are  not  intended  to  lay 
down  a  practice  or  anticipate  a  legally  sufficient  notice 
where  the  corporation  or  depositary  acts  independently 
under  the  law.  All  forms  hereinafter  set  forth,  when 
properly  used,  are  sufficient  to  state  a  case  for  the  issu- 
ance of  a  *^ consent.'' 

460.     Estimation  of  Tax  and  Retention  to  Cover. 

Whether  or  not  property  is  subject  to  an  inheritance 
tax  and  interest,  or  if  subject  thereto,  the  question  of 


301 

the  amount  thereof,  are  frequently  questions  of  law,  and 
sometimes  difficult  ones. 

The  basis  or  accrual  of  an  inheritance  tax  and  the 
method  of  determining  same,  has  practically  nothing  in 
common  with  the  General  Eevenue  Law.  The  decisions 
in  General  Eevenue  cases  are  only  occasionally  applica- 
ble in  elucidating  problems,  in  inheritance  tax  cases. 

It  may  be  said  that  in  a  general  sense  the  General  Rev- 
enue Law  (a  tax  on  property)  is  a  tax  according  to 
**facf ;  and  the  inheritance  tax  (a  tax  on  the  right  to 
receive  property)  is  a  tax  according  to  ^4aw'^;  although 
the  amount  of  the  tax  in  both  systems  is  determined  by 
the  value  of  the  property  and  fixed  rates.  But  where  a 
knowledge  of  a  fixed  rate  would  be  sufficient  to  deter- 
mine a  General  Revenue  tax,  it  might  be  only  an  inciden- 
tal element  in  determining  the  amount  of  an  inheritance 
tax. 

461.     Basis  for  Issuing  Consent — ^In  General. 

The  procedure  for  obtaining  a  consent  to  transfer  secu- 
rities, deposits  or  other  assets  is.  based  on  the  residence 
of  decedent  at  death ;  whether  there  is  administration  of 
the  estate;  the  situs  of  the  property;  the  nature  and 
character  thereof,  and  security  for  the  tax. 

The  requirements  of  the  state  officials  are  intended  to 
safeguard  the  interests  of  the  State,  and  at  the  same 
time  accomplish  the  quickest  possible  release  of  the  prop- 
erty and  disposition  of  the  question  of  taxation. 

These  requirements  are  invoked  in  all  cases  where  the 
bank,  trust  company,  safe  deposit  company,  corporation, 
institution  or  person  seeks  a  consent,  rather  than  esti- 
mate and  retain  the  tax  and  interest. 


302 

462.  Administration   of  Section  Nine— Two  Dis- 

tricts. 

For  the  purpose  of  expediting  business  under,  and  in- 
suring the  best  enforcement  of  Section  9,  the  Attorney 
General  and  State  Treasurer  have  divided  the  state  into 
two  districts — Cook  County,  known  as  the  Chicago  Dis- 
trict; and  all  other  counties,  known  as  the  Springfield 
District,  with  jurisdiction  as  follows : 

463.  Springfield  District — Business  Transacted  at 

Springfield,  Illinois. 

All  banks,  trust  companies,  deposit  companies.,  corpo- 
rations, institutions  and  persons  located  or  having  their 
principal  office  in  Illinois,  but  outside  of  Cook  County, 
and  having  in  their  possession  or  control  securities,  de- 
posits, or  other  ass.ets  (of  small  or  large  value  or 
amount)  belonging  to  or  standing  in  the  name  of  a  dece- 
dent who  died  a  resident  or  nonresident  of  this  state,  or 
belonging  to  or  standing  in  the  joint  names  of  such  a  de- 
cedent and  one  or  more  persons  (including  property  held 
as  collateral)  should  transact  their  business  with  the  At- 
torney Greneral  at  Springfield. 

464.  Book  or  Record  Transfers. 

All  banks,  deposit  companies,  trust  companies  and  cor- 
porations covered  by  the  Act  located  or  having  their 
principal  place  of  business  or  transfer  books  in  Illinois, 
but  outside  of  Cook  County  desiring  to  transfer  their 
stock  or  registered  bonds  on  the  books  of  the  corporation 
or  association  when  said  stock  or  bonds  (of  small  or 
large  value  and  including  collateral)  belong  to  or  stand 
in  the  name  of  a  decedent  who  died  a  resident  or  non- 
resident of  this  state,  or  when  said  securities  belong  to 
or  stand  in  the  joint  names  of  such  a  decedent  and  one 


303 

or  more  persons,  should  transact  their  business  with  the 
Attorney  General,  at  Springfield,  Illinois. 

465.  Chicago    District — Comprises    Cook    County. 

All  Business  Transacted  by  Inheritance 
Tax  Attorney  at  Chicago.  Tangible  Prop- 
erty or  Evidences  Thereof. 

All  corporations,  banks,  trust  companies,  safe  deposit 
companies,  institutions  and  persons  located,  or  having 
their  principal  office  or  principal  place  of  business,  in 
Cook  County,  and  having  in  possession  or  control  secu- 
rities, deposits  or  other  assets  (of  small  or  large  value) 
belonging  to  or  standing  in  the  name  of  a  decedent  who 
died  a  resident  or  nonresident  of  this  state,  or  belon^ng 
to  or  standing  in  the  joint  names  of  such  a  decedent  and 
one  or  more  persons  (including  property  held  as  collat- 
eral) should  transact  their  business  with  the  Inheritance 
Tax  Attorney*  at  Chicago. 

466.  Book  or  Record  Transfers. 

All  corporations,  banks,  trust  companies.,  deposit  com- 
panies, associations,  etc.,  comprehended  by  the  law,  hav- 
ing their  principal  office,  principal  place  of  business  or 
transfer  books  outside  the  State  of  Illinois,  or  in  Cook 
County  desiring  to  transfer  their  stock  or  registered 
bonds  on  the  books  of  the  corporation,  or  association, 
when  said  stock  or  bonds  (of  small  or  large  value,  includ- 
ing collateral)  belong  to  or  stand  in  the  name  of  a  dece- 
dent who  died  a  resident  or  nonresident  of  this  state,  or 
belong  to  or  stand  in  the  joint  names  of  such  a  decedent 


♦Inheritance  Tax  Attorney  is,  by  appointment,  joint  representative 
of  State  Treasurer  and  Attorney  General.  The  words  "Tax  Office"  oc- 
curring hereinafter  have  the  same  significance  as  Inheritance  Tax  At- 
torney. 


304 

and  one  or  more  persons,  should  transact  their  business 
with  the  Inheritance  Tax  Attorney  at  Chicago. 

Railroads  and  other  corporations  doing  an  interstate 
business  generally  come  within  the  Chicago  District. 

467.  Communication  to  Wrong  District. 

In  case  parties  communicate  with  the  wrong  district, 
the  matter  is  promptly  referred  to  the  proper  district 
for  disposition  and  no  rights  are  los.t  by  such  error. 

Notice — Statutory  Time  Waived. 

The  statutory  time  prescribed  for  notice  is  usually 
waived  when  the  corporation  or  depositary  defer  the 
transfer  until  the  issuance  of  consent. 

468.  Consent— Only    Lifts    Liability   for    Inheri- 

tance Tax. 

The  consent  of  the  Attorney  General  and  State  Treas- 
urer does  not  relieve  the  corporation,  bailee  or  depos- 
itary from  liability  under  the  general  laws.  It  only  clears 
and  relieves  liability  for  penalty  under  Section  9  in  in- 
heritance tax  cases. 

469.  Notice. 

Notice  mus.t  be  given  by  the  corporation,  bank,  trust 
company,  deposit  company,  institution  or  person.  There 
is  no  duty  on  the  survivor,  beneficiary,  heir,  administra- 
tor, executor  or  trustee  or  transferee  to  give  the  notice 
provided  by  Section  9. 

(See  decision  under  analysis  of  Section  9,  supra.) 


305 

470.  Springfield  District— How  to  Obtain  Consent 
to  Transfer.  Deceased  a  Resident  or  Non- 
resident of  Illinois."^ 

The  Attorney  General  and  State  Treasurer  will,  when- 
ever possible,  upon  application  of  a  safe  deposit,  banking 
or  trust  company,  issue  consents,  in  writing  for  the  trans- 
fer or  delivery  of  securities,  deposits  or  other  assets.  In 
order  that  such  consents  may  issue,  the  State  Treasurer 
and  Attorney  General  must  have  before  them  certain  in- 
formation as  to  the  estate  of  the  decedent.  To  the  end 
that  consents,  may  be  issued  without  undue  delay  and 
that  the  necessary  information  may  be  before  them,  the 
Attorney  General  and  State  Treasurer  have  prepared, 
and  will  furnish,  forms  of  affidavits  to  be  used  in  such 
cases.  One  form  of  affidavit  is  entitled  **Administba- 
TioN,"  and  the  other  **No  Administration.'' 

When  application  is  made  to  you  for  the  delivery  or 
transfer  of  securities,  deposits  or  other  assets,  belonging 
to  or  standing  in  the  name  of  a  decedent  or  belonging  to 
or  standing  in  the  joint  names  of  a  decedent  and  one  or 
more  persons,  and  an  executor  or  administrator  has  been 
appointed  in  Illinois,  and  you  have  determined  the 
proper  person  to  whom  to  make  the  transfer  or  delivery, 
have  the  affidavit  entitled  **  Administration  "  executed 
by  the  executor,  administrator,  survivor  or  other  person 
cognizant  of  the  facts  and  mail  such  affidavit  to  the  At- 
torney General,  Springfield,  Illinois.  Upon  receipt  of 
same,  joint  consent  will,  except  for  the  delivery  of  the 
contents  of  a  safe  deposit  or  other  box  or  boxes,  issue 
in  the  next  mail. 

In  case  the  affidavit  discloses  a  safe  deposit,  or  other 
box  or  boxes,  in  your  possession  or  under  your  control, 


•Procedure  as  announced  in  circular  pamphlet  issued  by  Attorney 
General  on  December  1st,  1911. 


306 

belonging  to  or  standing  in  the  name  of  a  decedent  or 
belonging  to  or  standing  in  the  joint  names  of  a  decedent 
and  one  or  more  persons,  arragements  will  be  made  for 
tbe  immediate  examination  of  the  contents  of  the  safe  de- 
posit or  other  box  or  boxes  and  for  the  delivery  and 
transfer  of  the  contents  thereof.  Emergency  cases  are, 
when  possible,  relieved  by  telephone  communication,  the 
Attorney  General  arranging  for  a  local  representative  to 
act. 

471.  No  AdministratioxL. 

When  no  administration  is  pending  you  may  have  exe- 
cuted an  affidavit  entitled  **No  Administration."  Mail 
such  affidavit  to  the  Attorney  General,  at  Springfield, 
Illinois.  Consents  in  such  cases  will  issue  with  all  dis- 
patch possible,  which,  in  most  cases,  will  be  by  next 
mail. 

472.  Deceased  Resident  of  Illinois— Administra- 

tion— Transfer    of    Shares    of    Stock    and 
Bonds  on  the  Books  of  the  Corporation. 

When  you  receive  an  application  to  transfer,  on  the 
books  of  your  corporation,  stock  or  registered  bonds, 
either  by  the  issuance  of  a  new  certificate  or  otherwise, 
use  the  affidavit  *^Administkation,''  and  particularly  de- 
scribe the  stock  by  its  certificate  numbers.,  and  the  bonds 
by  serial  or  other  identification  numbers,  and  further 
particularly  state  the  exact  name  or  names  the  stock 
stands  in, — for  example: 

Certificate  No.  A.  B.  6471  for  10  shares  of  the 
stock  of  First  National  Bank  of  London,  Illinois,  par 
value  $100  each,  standing  in  the  name  of  John  Z. 
Jones  and  G.  Fred  Smith. 

Certificate  No.  42  for  2  shares  of  The  Interna- 
tional Food  Company,  par  value  $25.00  each,  stand- 


307 

ing  in  the  name  of  Mary  Y.  Jones  and  Sylvester  D. 
E.  Ward. 

Six  2nd  mortgage  4|%  gold  bonds  of  Chicago  & 
Springfield  R.  E.  Co.,  maturing  July  1st,  1940,  par 
value  $1,000  each,  standing  in  the  name  of  The  Robt. 
Gr.  Brown  Estate  and  B.  Sam  Green,  deceased. 

Have  said  affidavit  filled  out  and  executed  in  your  place 
of  business  and  mail  to  the  Attorney  General  at  Spring- 
field, and  consent  to  transfer  will  issue  to  the  corpora- 
tion. 

473.     Decedent    a   Nonresident    of    Illinois — Book 
Transfer  of  Stock  or  Registered  Bonds. 

"When  application  is  made  to  any  bank,  safe  deposit 
company,  trust  company,  corporation  or  stock  associa- 
tion for  the  transfer  on  the  books  of  the  company  or 
association,  of  their  shares  of  stock  or  registered  bonds, 
when  such  securities,  belong  to  or  stand  in  the  name  of  a 
decedent  who  died  a  nonresident  of  this  state,  or  belong 
to  or  stand  in  the  joint  names  of  such  a  decedent  and  one 
or  more  persons,  the  draft  notice  hereinafter  set  forth 
and  generally  referred  to  as  Form  *^SS'^  should  be 
served,  by  mail  or  messenger,  upon  the  Attorney  Gen- 
eral, at  Springfield,  Illinois. 

On  receipt  of  this  notice  by  the  Attorney  General,  in- 
vestigation is  promptly  made  to  ascertain  whether  there 
is.  a  tax,  and  whenever  necessary,  a  printed  list  of  ques- 
tions is  required  to  be  answered,  by  the  foreign  executor, 
administrator  or  trustee,  in  affidavit  form.  These  ques- 
tions are  the  same  as  required  by  the  Chicago  District. 
If  said  investigation  discloses  no  tax,  consent  issues  im- 
mediately. If  a  tax  appears  to  be  due  the  state,  con- 
sents are  issued  on  sufficient  security  given,  or  when  the 
tax  is  paid  in  the  appraisement  proceeding  immediately 
instituted  under  the  law  for  its  legal  assessment. 


308 

474.     Form  Administration  Affidavit  Required  in 
Springfield  District. 

To  the  Attorney  General  and  State  Treasurer  of  the 
State  of  Illinois: 

In  the  Matter  of  the  Estate  of ,  deceased. 

State  of  Illinois,  | 

f  ss. 
County.  ) 


of  the of 

, ,  County  of and  State  of 

Illinois,  being  duly  sworn  on  oath  deposes : 

1st.    That  said  decedent  died  on  or  about  the. ........ 

day  of. . . . . . .  .u  .A.  D. ,  a  resident  of  the  County 

of and  State  of  Illinois,  leaving — 

(No  or  A) 

last  will  and  testament. 

2nd.    That ,. of  the  city 

of County  of and  State 

aforesaid,  is  now  acting  as .1 ,. ...  .^. 

(Administrator  or  Executor) 

by  order  of  the. . ., Court 

of  the  County  of  

3rd.  That  the  gross  personal  property  owned  by  de- 
cedent at  death,  situate  in  this  and  in  every  other  State 
and  Country,  had  a  gross  value  of  not  to  exceed  $..,..,... 
and  consisted  of   . 

(Notes,  Accounts,  Stocks,  Cash,  etc.) 

And  real  estate  and  interests  therein  in  the  State  of 
Illinois  not  to  exceed  in  gross  value  $ ,.  .>. .  and  gen- 
erally situate  and  consisting  of  as  follows:. ..  .> 


4th.     Further,  this  affiant  declares  he  has  a  general 
knowledge  of  the  financial  and  physical  condition  of  de- 


309 

cedent  for  a  number  of  years  prior  to  his  death,  and 
thereupon  answers  the  following  questions: 

(a)  Did  decedent,  during  life  and  while  sick  or 
injured,  make  gifts  or  transfers  of  money  or  prop- 
erty (real  or  personal),  or  of  any  interests  therein? 

Answer 

(Yes  or  No) 

(b)  Did  decedent,  during  life,  transfer,  assign,  or 
part  with  money  or  property  (real  or  personal),  or 
any  interest  therein,  reserving  any  part  thereof  or 
income  therefrom  until  death? 

Answer 

(Yes  or  No) 

5th.    Affiant  further  says  that 

(Safety  Deposit  Company 

has  in  its  possession  or  under  its  control  the 

or  Institution) 

contents  of  a  safety  deposit  or  other  box  or  boxes,  be- 
longing to  or  standing  in  the  name  of  said  decedent,  or 
in  the  joint  names  of  said  decedent  and. 

6th.  That  said  decedent,  at  the  time  of  decease,  had  on 
deposit  in  the of  the  City  of . 

(Bank  or  Institution) 

, County  of and  State 

aforesaid  $  . ., .,,  which  affiant 

requests  shall  be  immediately  transferred  to .. 

7th.  If  decedent  owned  shares  of  stock  in  Illinois 
corporations,  name  corporation,  certificate  numbers  and 
shares  evidenced  thereby  on  the  reverse  side  hereof. 


(Signature  of  Claimant) 


(Postofflce  Address) 

Subscribed  and  sworn  to  before  me  this 

day  of A.  D. , 


Notary  Public, 


310 

The  foregoing  affidavit  is  served  as  notice  of  the  trans- 
fer of  property  described  and  claimed  therein,  at  the 

undersigned's  place  of  business  in  the  City  of 

County  of and  State 

aforesaid,  on  the day  of A.  D 

pursuant  to  the  provisions  of  section  9  of  an  Act  to  tax 
gifts,  legacies,  inheritances,  transfers,  etc..  Laws  of  1909. 

Dated  this day  of A.  D 


(Signature  of  Bank,  Corporation,  Depositary,  etc.) 

By 


(All  real  estate  in  Illinois  and  all  personal  property, 
including  cash,  wherever  situate  must  be  included.) 

475.     No  Administration. 

To  the  Attorney  General  and  State  Treasurer  of  the 
State  of  Illinois,  Springfield  District, 

In  the  Matter  of  the  Estate  of deceased. 

State  of  Illinois,  ) 

>  ss. 
County  ) 


of  the of 

County  of 

and  State  of  Illinois,  being  sworn  on  oath  deposes : 

1st.    That  said  decedent  died  on  or  about  the 

day  of A.  D ,  a  resident 

of  the  County  of and  State  of  Illinois, 

leaving last  will  and  testament. 

(No  or  A) 

2nd.    That  said  deceased  left  h surviving 

and  

standing  in  the  relation  of as  heirs 

h only  heirs  at  law. 


311 

3rd.  That  the  gross  personal  property  owned  by  de- 
cedent at  death,  situate  in  this  and  in  every  other  State 
and  Country,  had  a  gross  value  of  not  to  exceed 
$ ,  and  consisted  of 

(Notes,  Accounts, 
Stocks,  Cash,  etc.) 

And  real  estate  and  interests  therein  in  the  State  of 

Illinois  not  to  exceed  in  gross  value  $ and 

generally  situate  and  consisting  of  as  follows: 


4th.  Further,  this  affiant  declares  he  has  a  general 
knowledge  of  the  financial  and  physical  condition  of  de- 
cedent for  a  number  of  years  prior  to  his  death,  and 
thereupon  answers  the  following  questions: 

(a)  Did  decedent,  during  life  and  while  sick  or  in- 
jured, make  gifts  or  transfers  of  money  or  property 
(real  or  personal),  or  of  any  interests  therein? 

Answee 

(Yes  or  No) 

(b)  Did  decedent,  during  life,  transfer,  assign  or 
part  with  money  or  property  (real  or  personal),  or  any 
interest  therein,  reserving  any  part  thereof  or  income 
therefrom  until  death. 

Answer 

(Yes  or  No) 

5th.    Affiant  futher  says  that  

(Safety  Deposit  Company  or  Institution.) 

has  in  its  possession  or  under  its  control  the  contents  of 
a  safety  deposit  box  or  other  box  or  boxes,  belonging 
to  or  standing  in  the  name  of  said  decedent,  or  in  the 
joint  names  of  said  decedent  and. ,. 


312 

Gth.    That  said  decedent,  at  the  time  of  decease,  had 
'  on  deposit  in  the 

(Bank  or  Institution) 

of  the  City  of County  of 

1. ., and  State  aforesaid 

$. which  affiant  requests  shall  be  imme- 

>  diately  transferred  to i , 

7th.    If  decedent  owned  shares  of  stock  in  Illinois  cor- 
porations,   name    corporation,  certificate  numbers  and 
;  shares  evidenced  thereby  on  the  reverse  side  hereof. 


(Signature  of  Claimant) 


■  1.  .1 I 

(Postofflce  Address) 


Subscribed  and  sworn  to  before  me  this 
day  of A.  D. 


Notary  Public. 

The  foregoing  affidavit  is  served  as  notice  of  the 
transfer  of  property  described  and  claimed  therein,  at 
the  undersigned's    place    of   business    in   the    City   of 

County  of — 

and  State  aforesaid,  on  the day  of 

.A.  D ,  pursuant 

to  the  provisions  of  Section  9  of  an  Act  to  Tax  Gifts, 
Legacies,  Inheritances,  Transfers,  etc..  Laws  of  1909. 

Dated  this day  of , A.  D.. . 


(Signature  of  Bank,  Corporation,  Depositary,  etc.) 

By 


313 

476.     Form  "SS"  Notice. 

(Used  in  both  Springfield  and  Chicago  districts.) 


(Name   of  Corporation  Giving  Notice) 

NOTICE. 

To  Hon —  .,. . Attorney  General. 

To  Hon State  Treasurer. 

(Springfield,  Illinois,  or  Chicago,  Illinois,  as  the  case  may  be) 

Estate  op Deceased,  who 

died  a  resident  of i 

(City,  County  and  State) 

Administration Where 

(Yes  or  No) 

I .1.  .1 

(Name  and  Postofflce  Address  of  Executor,  Administrator,  Trustee  or 
Applicant  for  Transfer) 

Pursuant  to  the  provisions  of  Section  Nine  of  an  Act 
to  Tax  Grifts,  Legacies,  Inheritances,  Transfers,  etc., 
Laws  of  Illinois,  1909 : 

You  are  hereby  notified  that  demand  has  been  made 
upon  the  undersigned  for  the  transfer  of  ,  .< 

(Describe  Shares  of  Stock  by  Certificate  Numbers;  Describe  Bonds   by 
Numbers  and  Series.     If  Held  as  Collateral.  State  Facts) 


To 

(Name  and  Address  of  Transferee) 


The  property  described  herein    is  shown   upon    our 
books  in  the  name  of , , 

(If  Above  Named  Decedent,  or  Otherwise,  so  State) 

The  name  and  address  of  party  desiring  transfer  is 
who  claims  as — .,. . 

(Executor,  Administrator,   Trustee,   etc.) 


(Name  of  Corporation  Giving  Notice) 

By 

Dated: 


314 


CHICAGO  DISTRICT. 


477.  Chicago  District — All  Business  Transacted 
ixrith  Joint  Representative*  of  Attorney 
General  and  State  Treasurer,  at  Chicago, 
Illinois. 

The  Attorney  General  and  State  Treasurer  have  an 
anxiliary  office  at  Chicago,  which  is  in  the  charge  of 
their  joint  representative  duly  accredited  to  conduct 
business  under  Section  9. 

A  general  classification  of  action  in  this  district  may 
be  summarized  as  follows: 

1.  Bank  deposits  deceased  resident  of  Illinois — ad- 
ministration of  the  estate  in  Illinois. 

2.  Bank  deposits — deceased  resident  of  Illinois — ^no 
administration  pending. 

3.  Bank  deposits — deceased  a  nonresident  of  lUinois 
— administration  or  no  administration. 

4.  Money,  securities,  deposits  and  assets  (other  than 
bank  deposits)  including  collateral,  in  control  or 
possession  of  a  bank,  trust  company,  corporation, 
institution  or  person — decedent  a  resident  or  non- 
resident of  Illinois — administration  or  no  ad- 
ministration. 

5.  Book  transfers  of  shares  of  stock  and  registered 
bonds — decedent  a  resident  or .  non-resident  of 
Illinois,  administration  or  no  administration. 

6.  Safe  deposit  company — storage  company,  etc., — 
decedent  a  resident  or  non-resident  of  Illinois — 
administration  or  no  administration. 


♦Inheritance  Tax  Attorney,  First  National  Bank  Building,  Chicago, 
lUinois. 


315 

478.  Bank  Deposits — Deceased  a  Resident  of  Illi- 

nois— ^Administration  of  Estate  in  Illinois. 

When  application  is  made  to  a  banking  institution 
by  an  administrator  or  executor,  for  the  transfer  of  a 
bank  deposit  of  money  (of  large  or  small  amount)  in 
its  possession  or  under  its  control  and  said  money  is 
owned  by  or  stands  in  the  name  of  a  deceased  resident 
of  Illinois,  or  is  owned  by  or  stands  in  the  joint  names 
of  such  a  decedent  and  one  or  more  persons,  said  bank- 
ing institution  may  with  safety,  immediately,  and  with- 
out previous  consent,  transfer  the  entire  deposit  to  said 
executor  or  administrator,  if  said  banking  institution 
complies  with  the  following  conditions: 

Fiest:  Have  said  executor  or  administrator  duly 
execute  and  acknowledge  in  your  bank  the  '*  Administra- 
tion" (Form  A)  affidavit  used  in  the  Chicago  District 
and  hereinafter  set  forth,  with  every  question  and  point 
of  information  answered,  and  the  names,  address  and 
dates  clearly  and  unmistakably  spelled  and  written. 

Second:  Mail  or  deliver  said  affidavit  the  same  day 
that  the  money  is  transferred,  to  the  Inheritance  Tax 
Attorney,  at  Chicago,  Illinois.  Consent  is  thereupon 
issued  at  once  and  mailed  to  said  banking  institution. 

479.  Transfer— What  Constitutes. 

A  transfer  does  not  necessarily  mean  the  delivery  by 
the  bank  of  the  money  itself  to  the  executor  or  adminis- 
trator. A  transfer  may  be  accomplished  by  crediting 
said  executor  or  administrator  on  the  books  of  said  bank 
with  the  money  in  question. 


316 


480.     (Form  A.)      Administration  Affidavit   (Chi- 
cago District) . 


(Name  of  Bank) 

Administration. 
Estate  of.  ., . . . 


deceased. 

Transfer  $ 


State  of  Ilolinois,  ) 
County  of  Cook.      ) 


of  the  City  of 

Chicago  (or  if  other  city  or  town  in  Illinois,  so  state), 
County  of  Cook  and  State  of  Illinois,  being  duly  sworn 
on  oath  deposes: 

That  he  is  regularly  acting  as  executor  or  adminis- 
trator of  the  above  named  estate  by  the  authority  of 
the  Probate  Court  of  Cook  County  (or  if  other  county, 
so  state),  Illinois,  evidenced  by  the  official  letters  and 

orders  thereof  issued  on  the .day 

of... A.  D.... 

That  the  above  named  decedent  died  testate  or  intes- 
tate on. ,. ... .,  a  resident  of  and 

domiciled  in  the  State  of  Illinois. 

And  it  is  alleged  and  affirmed  by  affiant  that  at  the 

time  of  decedent's  death  the , . 

of  Chicago  had  under 

(Name  of  Bank,  Trust  Company,  etc.) 

its  control,  property  belonging  to  said  decedent,  con- 
sisting of 

and  standing  in  the  name  of  


317 

which  property  affiant  hereby  requests  shall  be  imme- 
diately transferred  to  him. 

(Executor,  Administrator  or  Trustee) 

Residing  at .,. . 

(Business  or  Residence  Telephone) 

Subscribed  and  sworn  to  before  me  this. ., , 

day  of A.  D i. . . 

Notary  Public , 

The  foregoing  affidavit  is  served  as  notice  of  the 
transfer  of  property  described  and  claimed  therein,  at 
the  place  of  business  of  the  undersigned  in  Chicago  on 

the. . . ., day  of A.  D 

pursuant  to  the  provisions  of  Section  Nine  of  an  Act  to 
Tax  Gifts,  Legacies,  Inheritances,  Transfers,  etc.,  Lawsi 
of  1909. 


(Name  of  Bank) 

By 

(Name  of  Officer  and  Title) 


481.     Bank  Deposits — Deceased  Resident  of  Illinois 
— No  Administration  Pending. 

When  application  is  made  to  the  bank  by  the  rightful 
claimant  for  the  transfer  of  a  bank  deposit  when  the 
money  is  owned  by  or  stands  in  the  name  of  a  deceased 
resident  of  Illinois,  or  is  owned  by  or  stands  in  the 
joint  names  of  such  a  decedent  and  one  or  more  persons 
and  said  bank  determines  to  make  the  transfer  either 
before,  or  without  administration,  said  bank  may,  with 
safety,  before  receiving  ^' consent' \  transfer  immediate- 
ly, any  amount  up  to  and  including  $475.00  of  the  de- 


318 

posit,  if  the  rightful  claimant  executes,  in  the  bank,  the 
**No  Administration''  affidavit,  (Form  N)  hereinafter 
set  forth,  with  every  question  and  point  of  information 
answered,  and  said  bank  does  thereupon,  the  same  day 
the  money  is  transferred,  mail  or  deliver  said  affidavit 
to  said  Inheritance  Tax  Attorney. 

Consent  is  thereupon  issued  for  the  entire  deposit,  if 
No  Tax.  If  taxable,  no  consent  is  issued  on  the  balance 
of  the  deposit  until  the  tax  is  paid  or  security  therefor 
given. 

If  the  deposit  is  $475.00  or  less,  the  consent  having 
issued  to  the  bank,  the  transaction  is  closed. 

The  form  of  *^No  Administration"  now  in  use  in  the 
Chicago  district  is  as  follows: 

482.     (Form  ''N.")     No  Administration  Affidavit- 
Chicago  District. 


(Name  of  Bank) 

Estate  of 

{Deceased) 

Transfer  $. 


State  of  Illinois,  ) 
County  of  Cook,      f  ^®* 

of  the  City  of  Chicago, 

County  of  Cook  and  State  of  Illinois,  being  duly  sworn, 
on  oath  deposes : 

1.    That  the  above  named  decedent  died  intestate  on 

the day  of A.  D 

a  resident  of,  and  domiciled  in  the  State  of  Illinois,  and 
left  surviving  as  decedent's  only  heirs  at  law  and  next 
of  kin: 

Name  Relationship  to  Decedent  Address 


319 

2.     That  the  gross  personal  property  owned  by  the 
decedent  at  death,  situated  in  this  and  every  other  state 

and  country,  had  a  gross  value  of  $ , and 

consisted  of 

(Notes,  Cash,  Securities.  Chattels,  etc.) 


And  real  estate  in  the  State  of  Illinois  not  to  exceed 
in  gross  value  $ and  situate  as  follows : 

(Name  of  Street  and  House  Number.     If  Vacant,  Number  of  Lots  and 
General  Location  by  Streets) 

3.  Affiant  further  states  that  the  assets  of  said  es- 
tate are  chargeable  with  the  following: 

Funeral  expenses  $ 

Indebtedness  contracted  by  decedent 
and  unpaid  at  the  time  of  his  death 
not  less  than    *     *     * $. . . . . 

Total  minimum  indebtedness $ 

That  the  net  value  of  decedent's 
property  at  the  time  of  death  (iid 
not  exceed   $. , 

4.  Further,  this  affiant  positively  declares  he  has  a 
general  knowledge  of  the  financial  and  physical  condi- 
tion of  decedent  for  a  number  of  years  prior  to  h. ... 
death  and  thereupon  answers  the  following  questions: 

a.  Did  decedent  during  life  and  while  sick  or  in- 
jured make  gifts,  or  transfers,  of  money  or  prop- 
erty (real  or  personal)  or  of  any  interests  there- 
in, exceeding  in  value  $475.00? 


Answee 

(Yes  or  No.     Give  Particulars) 


320 

b.  Did  decedent  during  life  transfer,  assign  or  part 
with  money  or  property  (real  or  personal)  or  any 
interest  therein,  reserving  any  part  thereof  or 
income  therefrom  until  death? 

Answer 

(Yes  or  No.     Give  Particulars) 

5.    Affiant  claims  that  the 

(Name  of  Bank) 

has  under  its  control  property  of  the  decedent  which 

stands  in  the  name  of  ... . ,. 

and  consists  of  . . 


and  which  said  affiant  requests  the  immediate  transfer 
thereof  to 

(Legal  Relation  of  Creditor  of  Decedent) 

8.    Affiant  further  states  that  he  is  the  same  person 

described  as    . , , 

in  Clause  One  of  this  affidavit. 


Eesiding  at ., . .,. . 

Business  or  residence  telephone. 

Subscribed  and  sworn  to  before  me  this 

day  of , A.  D 


Notary  Public, 

The  foregoing  affidavit  is  served  as  notice  of  the 
transfer  of  property  described  and  claimed  therein,  at 
place  of  business  of  the  undersigned,  in. 

(City) 

on  the day  of. ....,.., 

pursuant  to  the  provisions  of  Section  Nine  of  an  Act  to 
Tax  Gifts,  Legacies,  Inheritances,  Transfers,  etc..  Laws 
of  1909. 


(Name  of  Bank) 

By 

(Name  of  Officer  and  Title) 


321 

483,  Bank  Deposits — Deceased  a  Nonresident  of 

Illinois — Administration  or  No  Adminis- 
tration. 

When  a  banking  institution  has  in  its  possession  or 
under  its  control  a  money  deposit  or  deposits  owned 
by  or  standing  in  tlie  name  of  a  decedent  who  died  a 
non-resident  of  this  state,  or  owned  by  or  standing  in 
the  joint  names  of  such  a  decedent  and  one  or  more  per- 
sons, no  transfer  can  be  made  of  said  deposit  or  deposits 
or  any  part  thereof  (under  the  procedure  of  tax  office) 
until  consent  issues.  When  application  is  made  for  the 
transfer  of  said  deposit  or  any  part  thereof,  a  notice 
should  be  served  upon  said  Inheritance  Tax  Attorney. 
Said  notice  is  described  as  Form  ^*SS''  hereinbefore  set 
forth  on  page  313. 

On  receipt  of  the  notice,  the  Tax  Office  acts  as  is  here- 
inafter set  forth  in  case  of  non-residents. 

484.  4tli.     Money,  Securities,  Depositis  or  Other 

Assets  (Other  Than  Bank  Deposits,  but 
Including  Collateral)  Under  Control  or  in 
Possession  of  a  Bank,  Trust  Company,  Cor^- 
poration,  Institution  or  Person — Decedent 
a  Resident  or  Nonresident  of  Illinois-- Ad- 
ministraton  or  no  Admnistration. 

When  a  bank,  trust  company,  corporation  (other  than 
a  safe  deposit  company)  institution  or  person  has  un- 
der control  or  is  in  possession  of  securities,  deposits 
(except  bank  deposits)  or  other  assets  of  small  or  large 
amount,  including  collateral,  owned  by  or  standing  in  the 
name  of  a  decedent,  who  was  a  resident  or  non-resident 
of  Illinois  at  death,  or  owned  by  or  standing  in  the  joint 
names  of  such  a  decedent  and  one  or  more  persons,  de- 
fiires  a  consent  to  transfer  or  deliver  the  same,  a  form 


322 

''SS''  notice  should  be  served  by  mail  or  messenger,  on 
said  Tax  Attorney,  who  thereupon  acts  as  follows. 

485.  a.     Residence  in  Illinois— Administration. 

If  the  notice  discloses  the  residence  of  decedent  to 
have  been  in  Illinois  at  death  and  administration  under 
security  of  a  bond  is  pending  in  this  state,  the  state  is 
generally  secure  and  the  consent  issues  at  once,  regard- 
less of  the  amount  of  property. 

If  the  character  or  amount  of  property,  or  other  cir- 
cumstance, seems  to  necessitate  an  examination  of  the 
same,  an  appointment  is  made  with  the  depositary  or 
bailee,  and  a  representative  of  the  state  officers  exam- 
ines the  property  and  reports  the  character,  amount  and 
estimated  value. 

In  cases  where  it  appears  that  the  bond  of  the  ex- 
ecutor or  administrator  is  insufficient  to  warrant  the  is- 
suance of  consent  without  securing  the  tax,  arrange- 
ments are  made  for  such  security  as  a  basis  for  releas- 
ing the  property. 

486.  b.   Residence  in  Illinois — ^No  Administration. 

Where  no  administration  is  pending  an  examination 
is  made  of  the  property.  If  it  appears  from  such  that 
a  tax  is  due,  no  consent  to  transfer  is  issued  until 
security  is  provided  for  the  tax.  If  no  tax  is  disclosed 
consent  issues  at  once. 

487.  Security. 

The  security  demanded  as  a  basis  for  issuing  consents 
is  generally  a  deposit  of  money  with  a  bank. 

488.  Reports  of  Examiners. 

Eeports  of  examiners  are  not  disclosed  to  the  public. 


323 

Property  of  a  living  person,  commingled  with  a  de- 
cedent's, may  be  described  on  such  report,  and  other 
information  may  be  contained  therein  which  should  not 
and  is  in  no  case  disclosed  by  the  &tate  officials. 

489.  Nonresidents-— When  Decedent  Is  a  Nonresi- 
dent of  Illinois  and  Regardless  of  Whether 
There  Is  or  Is  Not  Administration  of  the 
Estate.  Action  of  the  Tax  Office  on  Receipt 
of  Form  "SS"  Notice. 

Any  safe  deposit  company,  trust  company,  bank,  cor- 
poration, institution  or  person  in  possession  or  control 
of  securities,  deposits  or  other  assets  (of  small  or  large 
amount — including  collateral)  owned  by  or  standing  in 
the  name  of  a  decedent  who  died  a  non-resident  of  this 
state,  or  owned  by  or  standing  in  the  joint  names  of  such 
a  decedent  and  one  or  more  persons,  cannot  transfer  or 
deliver  such  property  within  the  practice  of  the  tax  de- 
partment until  a  consent  therefor  is  issued.  When  said 
safe  deposit  company,  trust  company,  bank,  corporation, 
institution  or  person  is  in  possession  or  control  of  prop- 
erty so  owned  or  held  and  an  application  is  made  by 
the  administrator,  executor  or  rightful  claimant  for  the 
transfer  or  delivery  thereof,  said  safe  deposit  company, 
etc.,  should  serve  upon  the  Tax  Attorney  Form  **SS'' 
notice.  On  receipt  of  said  notice  a  printed  list  of  ques- 
tions, commonly  called  Non-Resident  questions*  is  im- 
mediately mailed  to  the  non-resident  executor,  adminis- 
trator, trustee,  or  applicant  for  transfer,  which  ques- 
tions must  be  answered  in  detail  by  affidavit. 


•Any  person,  corporation  or  institution  interested  in  an  actual  case 
may  obtain  these  printed  questions  in  blocks  of  five  to  twenty-five  free 
of  charge,  on  written  request  to  the  Inheritance  Tax  Attorney.  To 
include  these  questions  in  this  book  would  inevitably  lead  to  confu- 
sion. New  questions  and  interpretations  of  the  law  will  necessarily 
compel  changes. 


324 

These  questions  are  designed  to  fully  cover  all  in- 
formation legitimately  necessary  to  determine  whether 
a  tax  has  accrued  to  the  State  of  Illinois  by  reason  of 
the  death  of  decedent  by  the  ownership,  actually  or  con- 
structively, of  property  ** within  the  state/' 

They  are  further  designed  to  cover  in  one  *' transac- 
tion'' the  innumerable  points,  which,  under  a  scheme  or 
system  of  determining  a  tax  on  each  item  of  stock  or 
property  as  it  arose  for  consideration,  would  require 
everlasting  correspondence,  delay  and  supplementary  or 
additional  proceedings. 

On  receipt  of  the  affidavit  answering  said  questions,  a 
written  consent  to  transfer  is  sent  to  the  corporation  or 
depositary,  releasing  all  securities,  deposits  or  other 
assets,  if  no  tax  appears  to  be  owing  the  state. 

If  there  is  a  tax,  no  consent  is  issued  until  the  same 
is  paid  or  a  deposit  of  money  made  with  a  bank  to  se- 
cure the  State  Treasurer  and  Attorney  General  for  as- 
suming the  responsibility  of  releasing  the  property  with- 
out payment  of  tax. 

In  case  a  tax  is  shown  by  the  affidavit  the  tax  attorney 
secures  the  appointment  of  an  appraiser,  who  sets  the 
case  forbearing  at  the  appraisers'  hearing  room  (located 
at  the  Inheritance  Tax  Office),  and  proceeds  to  dispose 
of  the  case.  After  the  case  is  heard  as  provided  by  Sec- 
tion 11  (more  particularly  outlined  hereinafter  under 
**Sec.  11"),  the  executor,  trustee,  administrator,  heirs, 
beneficiaries  and  their  respective  counsel,  receive  from 
the  County  Judge  having  jurisdiction  of  the  case,  a  no- 
tice of  the  amount  of  tax.  Consents  are  issued  on  pay- 
ment of  said  tax  and  interest.  If  a  tax  is  paid  within  six 
months  from  the  death  of  decedent,  a  discount  of  ^ve  per 
cent,  is  allowed  and  no  interest  is  charged.    If  the  tax 


325 

is  not  paid  within  six  months  from  the  date  of  death,  no 
discount  is  allowed  and  interest  runs  from  the  date  of 
death  until  payment  of  tax. 

490.  Deposit — When  Made  Consent  Issues. 

A  deposit  of  money  may  be  made  with  the  depositary 
of  the  tax  office  (a  national  bank)  either  before  or  dur- 
ing the  appraisement,  and  when  made,  consents  are  is- 
sued and  mailed  at  once,  before  pa3mient  of  tax. 

491.  Deposit  Returned  if  No  Tax. 

A  deposit  is  held  until  the  tax  is  determined  by  the 
County  Judge  and  at  that  time  so  much  thereof  as  is 
necessary  to  pay  the  tax  and  interest  is  ordered  paid  to 
the  County  Treasurer  and  the  balance,  or  all  in  case  of 
No  Tax,  is  immediately  returned  by  the  bank  (deposi- 
tary) to  the  depositor. 

The  deposit  to  secure  the  tax  is  in  the  nature  of  a 
written  guaranty  and  provides  that  the  money  is  payable 
only  to  the  depositor  or  a  county  treasurer  to  liquidate 
tax.    (See  ** Deposit  System"  post,) 

492.  Delay  in  Issuing  Consents. 

The  delay  in  obtaining  consents  will  most  frequently 
occur  by  the  failure  of  executors,  administrators,  trus- 
tees, heirs,  etc.,  to  act  promptly  in  returning  an  affidavit, 
answering  the  non-resident  questions. 

493.  5.     Book  Transfers  of  Stock  and  Registered 

Bonds — Decedent  a  Resident  or  Nonresi- 
dent— Administration  and  No  Administra- 
tion. 

When  the  corporation  or  stock  association  desires  to 
secure  a  consent  to  transfer,  on  the  books  of  the  cor- 


326 

poration  or  association,  its  certificates  or  shares  of  stock 
and  registered  bonds,  when  the  same  are  owned  by  or 
stand  in  the  name  of  a  deceased  resident  or  non-resi- 
dent of  this  state,  or  owned  by  or  stand  in  the  joint 
names  of  such  a  decedent  and  one  or  more  persons,  the 
proper  proceeding  is  to  serve  by  mail  or  messenger,  a 
Form  '*SS''  notice  (outlined  in  the  foregoing  pages) 
upon  the  Tax  Attorney. 

a.  If  the  decedent  died  a  resident  of  Illinois  and  ad- 
ministration is  pending  the  consents  are  issued  at  once, 
regardless  of  the  amount  or  value  of  the  securities.  The 
exception  to  this  action  is  infrequent  and  occurs  when 
the  bond  of  the  legal  representative  appears  insuffi- 
cient. 

h.  If  the  decedent  died  a  resident  of  Illinois  and  no 
administration  is  pending,  no  consent  issues  if  there  ap- 
pears to  be  a  tax  due,  until  the  same  is  secured  or  paid, 
or  subsequent  administration  justifies  releasing  the  prop- 
erty.   If  there  is  no  tax  due  consent  issues  immediately. 

c.  If  decedent  died  a  non-resident  of  Illinois  no  con- 
sent issues  until  an  affidavit  is  presented  to  the  tax  office 
answering  under  oath  the  non-resident  questions,  re- 
ferred to  in  Par.  489'. 

494.     Nonresident  Estates — Affidavit  Required. 

In  all  non-resident  estates,  regardless  of  the  nature 
or  character  of  the  transfer,  the  requirements  of  the 
state  officials,  before  passing  on  the  question  of  tax  and 
consent,  is  that  the  non-resident  questions,  mailed  to 
every  executor,  administrator,  trustee  or  other  appli- 
cant for  transfer,  must  be  answered  under  oath  by  affi- 
davit. On  receipt  of  the  affidavit  consent  issues  as  here- 
inbefore stated. 


327 

495.  Safe  Deposit  Company — Storage  Company- 

Decedent  a  Resident  or  Nonresident  of  Illi- 
nois—Administration or  No  Administra- 
tion. 

When  a  safe  deposit  company,  warehouse  company  or 
other  depositary  conducting  a  storage  or  safe  deposit 
business,  has  in  its  possession  or  under  its  control  se- 
curities, deposits  (of  any  character)  or  other  assets,  be- 
longing to  or  standing  in  the  name  of  a  decedent  who 
was  a  resident  or  non-resident  of  Illinois,  or  belonging 
to  or  standing  in  the  joint  names  of  such  a  decedent  and 
one  or  more  persons,  and  application  is  made  for  the 
transfer  of  such  property,  the  practice  is  as  follows: 

The  depositary  arranges,  by  telephone,  messenger  or 
letter,  with  the  Inheritance  Tax  Office  for  the  examina- 
tion of  the  box,  safe,  securities,  deposits  or  other  assets, 
at  a  ceri;ain  hour  of  a  ceri;ain  day,  which  time  is  recorded 
on  a  calendar  kept  in  the  tax  office.  At  the  time  ap- 
pointed, a  representative  properly  accredited  from  said 
tax  office,  appears  at  the  office  of  the  depositary  {not 
the  office  of  the  attorney  or  applicant  for  transfer)  and 
if  the  claimant  of  the  property  is  present  and  is  granted 
access  to  the  box,  safe  or  property,  the  State's  repre- 
sentative makes  an  examination  of  the  securities,  de- 
posits and  assets  affected  by  Section  9.  Neither  the  ap- 
pearance or  attendance  of  an  examiner  nor  the  exam- 
ination and  release  of  the  property  relieves  the  depos- 
itary from  the  legal  responsibility  of  determining  who 
is  entitled  to  the  property  or  contents  of  the  box,  or  the 
right  of  access  thereto. 

496.  When  Consent  Issues. 

This  examination  is  reduced  to  writing  and  reported 


328 

to  tlie  Inheritance  Tax  Office,  upon  which  report  it  acts 
as  follows: 

a.  "When  decedent  died  a  resident  of  Illinois  and 
Letters  of  Administration  have  been  granted  by  some 
court  of  probate  in  the  state,  consent  issues  the  same 
day  the  report  of  the  examiner  is  received;  unless  the 
lack  of  a  sufficient  surety  on  the  bond  of  the  executor  or 
administrator  makes  it  necessary  that  security  for  the 
tax  be  first  provided.  Consent  is  promptly  issued  in  all 
cases  of  No  Tax. 

h.  When  decedent  died  a  resident  of  Illinois  and 
there  is  no  administration  pending.  In  this  class  of  cases 
the  examiner  usually  endeavors  to  secure  an  affidavit 
from  the  claimant  of  the  property,  which  together  with 
the  examiner's  report,  generally  supplies  sufficient  in- 
formation for  action.  Consent  in  this  class  of  cases  is- 
sues at  once  when  there  is  no  tax.  If  a  tax  is  shown, 
consent  issues  on  security  given  for  the  payment  of  the 
tax,  or  when  the  tax  is  paid  in  an  appraisement  pro- 
ceeding regularly  conducted  under  Section  11. 

c.  When  decedent  dies  a  non-resident  of  Illinois, 
consents  are  issued  as  in  other  cases  of  transfers  of 
non-residents'  property.  The  fact  of  administration  is 
immaterial  in  cases  of  non-residents.  Ancillary  admin- 
istration does  not  justify  the  release  of  the  property. 
An  affidavit  giving  the  information  specified  in  the  non- 
resident questions  hereinbefore  explained  is  required. 

497.     Emergency  Examinations. 

A  communication  with  the  tax  office  two  days  in  ad- 
vance of  the  time  of  examination  is  usually  sufficient  to 
secure  an  examiner.  However,  the  tax  office  acts  on 
notice  of  one  day,  or  even  less,  when  possible,  regardless 


329 

of  its  right  to  ten  days'  notice.    The  safe  course  is  to 
arrange  for  examination  in  advance. 

In  cases  where  the  claimant  of  the  property  is  a  per- 
son **  employed '^  in  an  occupation  preventing  his  or  her 
appearance  at  the  examination  without  pecuniary  loss 
or  jeopardy  of  employment,  the  time  of  examination  will 
be  fixed  at  an  hour  which  will,  so  far  as  possible,  pre- 
vent such  loss  or  jeopardy. 

498.     Deposit  System. 

The  deposit  system  was  devised  to  assist  residents  and 
non-residents  in  securing  consents  on  taxable  property 
before  appraisement.  When  any  person  or  corporation 
desires  the  immediate  transfer  of  property  which  is  ap- 
parently subject  to  a  tax  and  it  is  unsafe  for  the  State 
officials  to  issue  the  consent  without  security,  the  Tax 
Office  will  estimate  the  amount  of  tax,  and  issue  a  con- 
sent to  transfer  on  the  deposit  by  the  executor,  trustee, 
administrator,  person  or  corporation,  of  a  sum  of  money 
sufficient  to  cover  the  tax  and  interest. 

The  amount  of  the  deposit  is  fixed  by  the  Tax  Office, 
and  is  intended  to  be  slightly  in  excess  of  the  actual  tax 
and  interest.  Both  residents  and  non-residents  may  use 
this  method  of  securing  immediate  consents. 

When  the  tax  and  interest  is  determined  according  to 
law,  the  amount  thereof  is  paid  out  of  the  deposit  to  the 
County  Treasurer  of  the  county  wherein  the  appraise- 
ment was  had.  All  moneys  in  excess  of  tax  and  interest 
is  returned  at  once  to  the  depositor,  not  to  the  agent  or 
attorney  for  the  depositor. 

In  case  the  depositor  or  legal  representative  antici- 
pates a  disagreement  in  the  result  of  the  appraisement 
and  intends  to  prosecute  an  appeal  to  review  the  assess- 
ment, the  tax  office  will  on  written  request  before  the 


330 

close  of  the  appraisement,  refrain  from  ordering  the  as- 
sessment paid,  and  will  allow  the  deposit  to  stand  until 
the  appeal  is  disposed  of. 

No  bond,  other  than  for  costs,  is  required  in  deposit 
cases,  where  an  appeal  is  taken. 

499.     Recomiuendatian  to  Nonresidents. 

One  method  of  getting  quick  results  when  the  decedent 
was  a  non-resident  is  for  non-resident  banks,  trust  com- 
panies, brokerage  houses  and  corporations  to  secure  from 
the  tax  office  a  supply  of  *  *  Non-Eesident  Questions'* 
which  point  out  the  requirements  of  the  State  officials, 
and  when  a  client  or  patron  (executor,  trustee,  admin- 
istrator, heir,  etc.)  desires  to  secure  consent  to  transfer 
stock  or  registered  bonds  of  corporations,  securities,  de- 
posits or  other  assets  affected  by  the  Illinois  Tax  Law, 
have  said  client  or  patron  answer  the  questions  by  affi- 
davit in  the  place  of  business  of  such  bank,  corporation, 
etc.,  and  mail  the  same  to  said  Tax  Attorney,  at  Chicago. 
Consents  will  issue  by  next  mail,  if  no  tax,  and  if  a  tax, 
security  may  be  arranged  by  letter,  wire  or  telephone. 
This  method  saves  the  time  of  first  writing  to  Chicago 
or  Springfield  for  the  requirements  of  state  officials,  and 
also  the  time  of  transmitting  the  printed  requirements 
or  questions  to  the  non-resident  corporation,  bank,  exec- 
utor, administrator,  etc.,  by  mail. 

Many  foreign  brokerage  houses  and  banks  have  adopt- 
ed this  practice. 

The  tax  office  will  always  telegraph  (collect)  estimate 
of  tax  shown  by  affidavit,  so  deposit  to  cover  same  may 
be  made  with  as  little  delay  as  possible. 

Deposit  may  be  made  by  telegraph  when  depositor  con- 
forms to  the  terms  of  deposit  contract.* 

♦Deposit  blanks  are  furnished  free  on  application. 


331 

500.  A£ELdavit  Answering  Nonresident  Qnestions. 

The  affidavit  whicli  must  be  presented  to  the  Tax  Of- 
fice should  be  carefully  prepared  and  contain  the  par- 
ticular information  asked  for,  and  be  accompanied  with 
the  papers  required  in  said  questions. 

501.  Common  Mistakes  in  Preparing  Affidavit. 

The  most  frequent  omission  from  the  affidavit  is  the 
certificate  numbers  evidencing  shares  of  stock  and  regis- 
try numbers  of  bonds,  and  the  failure  to  state  the  class 
of  stock,  viz.,  whether  preferred,  common,  first  preferred, 
second  preferred  or  whatever  class  of  stock  is  intended 
for  transfer. 

Another  frequent  omission  from  the  affidavit  is  the 
ages,  as  of  the  death  of  decedent,  of  all  annuitants  and 
tenants  for  years  or  life.  As  well  as  failure  to  attach 
copy  of  will  or  table  of  heirship. 

502.  Belay. 

The  failure  to  prepare  affidavit  promptly,  or  omission 
to  furnish  the  particular  information  and  papers  required 
will  inevitably  cause  delay  in  obtaining  consents. 

Affidavits  are  examined  by  the  Tax  Department  the 
same  day  they  are  received  and  where  no  tax  appears  to 
be  due,  consents  are  issued  immediately. 


332 

503.  Section  11.  In  General.  Duty  of  Lawyer. 
Investigation.  Appraisement.  Evidence. 
Special  Guardian.  Appraiser's  Report. 
Order  of  Tax.  Tax  Receipt.  Appeal  to 
County  Court.     Appeal  to  Supreme  Court. 

When  an  attorney  has  engaged  his  services  to  an  ex- 
ecutor, administrator,  trustee,  heir,  beneficiary  or  trans- 
feree, it  is  as  much  his  duty  to  properly  advise  the  client 
of  the  liabilities  and  requirements  of  the  tax  law,  as  the 
administration  law  and  other  laws  affecting  the  client. 

Therefore  when  property  is  transferred  by  death, 
whether  by  will  or  intestate  laws ;  or  by  deed  or  gift  made 
prior  to  death  within  Section  1,  an  important  question 
to  be  determined  by  said  attorney  is  the  liability  and 
requirements  under  the  inheritance  tax  law. 

As  stated  in  the  preceding  outline,  the  first  contact 
with  the  tax  law  usually  occurs  by  reason  of  Section  9, 
when  a  decedent  had  property  or  some  interest  therein, 
in  the  possession  or  under  the  control  of  a  safe  deposit 
company,  trust  company,  bank,  corporation,  institution 
or  person,  or  when  a  decedent  owned  shares  of  stock  or 
registered  bonds,  and  it  is  desired  by  the  legal  repre- 
sentative, or  survivor  or  other  claimant  to  have  the  same 
transferred  on  the  books  of  the  company. 

After  possession  of  such  property  has  been  secured, 
or  sometimes  during  its  retention  by  the  depositary 
pending  the  issuance  of  consents  for  its  transfer  by  the 
state  officials,  the  matter  of  procedure  for  determination 
and  payment  of  tax,  or  the  process  of  clearing  possible 
inheritance  tax  liens,  arises. 

It  is  to  be  noted  that  the  County  Judge,  and  not  the 
County  Court,  is  given  the  power  by  Section  11  to  ap- 
point an  appraiser,  and  ^x  the  tax. 

This  section  has  always  been  considered  as  providing 


333 

the  method  for  determining  the  tax  by  investing  original 
jurisdiction  in  the  County  Judge  for  that  purpose.  How- 
ever, this  view  is  not  unanimous.  It  has  been  argued 
that  a  tax  can  be  determined  in  an  original  proceeding 
before  the  court  under  Section  15,  Law  of  1909,  and  also 
by  an  original  proceeding  under  Section  23,  L.  1909.  Also 
that  postponed  taxes  may  be  assessed  by  a  proceeding 
under  Section  15.  The  latter  question  has  been  raised 
by  a  recent  suit*  in  the  County  Court,  wherein  the  trus- 
tees of  a  fund  on  which  the  tax  was  postponed  prior  to 
July  1st,  1909,  subsequently  petitioned  the  court  to  as- 
sess a  tax  on  property  vesting  at  the  death  of  a  life  ten- 
ant, on  the  values  fixed  in  the  original  appraisement  and 
as  of  the  original  testator's  death. 

But  beginning  with  and  including  the  first  tax  case  un- 
der the  law  of  1895,  and  continuing  to  the  present  day, 
taxes  have  been  assessed  by  the  County  Judge  under 
Section  11  of  the  L.  of  1895,  and  Section  11  of  the  L.  of 
1909,  through  the  method  therein  provided,  and  not  by 
the  County  Court.    {People  v.  MUls,  247  lU.  147.) 

(See  cases  under  ** County  Judge.'') 

Section  15  has  been  heldf  to  cover  only  delinquents 
after  assessment  under  Section  11. 

504.     Appraisement  Under  Section  11. 

Section  Eleven  provides :  In  order  to  fix  the  value  of 
property  of  persons  whose  estates  shall  be  subject  to  the 
tax,  the  County  Judge,  on  application  of  any  interested 
party,  or  upon  his  own  motion,  shall  appoint  an  ap- 
praiser, who  shall  notify  by  mail  all  interested  parties 
of  the  time  and  place  he  will  appraise  the  property.    At 


•Estate  of  William  D.  Ewart,  deceased,  County  Court  No.  28733,  ap- 
pealed to  Supreme  Court. 

fOpinion  of  Attorney  General  369. 


334 

such  time  the  appraiser  shall  determine  the  fair  market 
value  of  the  property  appraisable.  He  may,  with  leave 
of  the  County  Judge,  subpoena  witnesses  and  take  evi- 
dence under  oath.  All  of  his  proceedings  must  be  re- 
ported in  writing  to  the  County  Judge,  who  shall  forth- 
with assess  and  fix  the  then  cash  value  of  all  estates, 
etc.,  and  the  tax  to  which  same  are  liable  and  shall  im- 
mediately give  notice  by  mail  to  all  parties  known  to 
be  interested  therein. 

605.     Legal  Representative,  Beneficiary  and  State 
"Interested  Parties." 

The  safe  course  for  all  parties  liable  to  pay  the  tax 
either  as  executor,  administrator  or  beneficiary,  is  to  take 
action  immediately  after  the  death,  in  order  to  insure  a 
completion  of  the  appraisement  before  six  months  from 
the  death,  so  that  payment  may  be  made  within  that 
period,  and  thereby  secure  a  discount  of  five  per  cent, 
and  avoid  the  payment  of  interest.    (Sec.  3,  L.  1909.) 

As  stated  in  the  law,  any  interested  party  may  peti- 
tion the  County  Judge  for  an  appraiser.  The  inheri- 
tance tax  attorney  or  Attorney  General  should  be  served 
with  notice  of  this  action. 

The  Inheritance  Tax  Attorney,  whenever  he  is  ad- 
vised a  tax  is  due  the  State,  moves  for  an  Appraiser. 
Primarily  any  attorney  may  present  to  him  an  actual  case 
and  demand  his  attitude.  If  this  is  desired,  it  is  neces- 
sary to  present  the  following  papers :  True  copy  of  ap- 
plication for  letters,  copy  of  will,  table  of  heirship,  in- 
ventory, or  complete  statement  of  property,  real  or  per- 
sonal ;  debts  due  at  death,  including  mortgages.  If  a  tax 
is  shown,  the  Inheritance  Tax  Ofiice  moves  for  an  ap- 
praisement. 


335 

506.  Appraiser. 

The  Appraiser  is  selected  and  appointed  by  the  County 
Judge,  without  recommendation  or  suggestion.  He  may 
appoint  on  his  own  motion  or  on  petition.  His  appoint- 
ment is  made  by  the  entry  of  a  written  order,  which,  to- 
gether with  the  oath  of  the  Appraiser,  is  filed  with  the 
Clerk  of  the  County  Court.  Upon  the  appointment  of 
the  Appraiser,  or  before,  the  tax  attorney  mails  to  the 
attorney  for  estate,  a  letter  requesting  those  papers 
which  the  County  Judge  requires  to  be  contained  in  the 
Appraiser's  report. 

These  papers  are  generally  the  will,  table  of  heirship, 
inventory,  bill  of  appraisement  and  application  for  let- 
ters. There  is  no  provision  in  the  law  requiring  attor- 
neys, executors  or  administrators  or  other  persons  to 
furnish  them.  A  fairly  well  established  practice  to  fur- 
nish these  papers  has  proved  helpful  to  both  the  State 
and  estate. 

Said  Appraiser,  as  soon  after  appointment  as  practi- 
cable, serves  notice,  by  mail,  upon  all  interested  parties, 
which  notice  declares  that  a  hearing  will  be  held  at  a  cer- 
tain hour,  day  and  place,  for  the  purpose  of  valuing  all 
property  appraisable  by  reason  of  the  death  of  dece- 
dent. 

507.  Hearing  Rooms — Appraisements  Had  There- 

in. 

In  Cook  County  all  hearings  are  held  at  the  Apprais- 
er's hearing  room  in  the  Inheritance  Tax  Office  at  Chi- 
cago. All  cases  are  set  and  heard  in  their  turn  upon  a 
trial  calendar. 


336 

508.  Hearing:     Before      Appraiser  —  Nonresident 

Cases. 

If  tlie  decedent  died  a  non-resident  of  the  State  the 
only  evidence  necessary  is  the  affidavit  filed  with  the  tax 
office  in  response  to  and  containing  the  information  and 
papers  required  in  the  printed  non-resident  questions, 
heretofore  explained  under  Section  9.  However,  the  ex- 
ecutor or  others  conversant  with  the  facts,  may  appear 
personally  and  testify. 

509.  Resident  Cases. 

The  Appraiser  presides  at  the  hearing  and  the  rules 
of  procedure  are  similar  to  those  before  a  master  in 
chancery,  except  that  the  appraisement  is  in  the  nature 
of  a  common  law  proceeding.  The  executor  or  admin- 
istrator must  be  present  at  the  first  hearing,  and  when 
necessary,  at  adjourned  hearings.  The  presence  of  heirs 
or  beneficiaries  is  required  in  many  cases. 

The  State  usually  proceeds  with  the  examination  of 
the  executor,  administrator  or  other  person  and  seeks  to 
develop  all  material  facts  which  are  necessary  or  sub- 
ject of  inquiry  under  the  law.  The  rules  of  evidence  are 
the  same  as  in  a  common  law  proceeding.  It  has  been 
held  by  the  County  Court  of  Cook  County  that  an  Ap- 
praiser may  make  valuations  without  evidence  and  on 
his  own  inspection.  This  latter  power  is  seldom  resorted 
to.  Both  the  State  and  estate  may  produce  witnesses  at 
the  hearing  to  establish  any  material  fact  or  facts. 

Nearly  every  case  presents  a  different  situation.  Dif- 
ferent appraisements  develop  various  conditions  and 
questions.  Therefore  it  is  only  practicable  to  state  the 
facts  which  are  uniformly  necessary  for  the  record  in 
every  estate.    They  are: 


337 

1st.    Date  of  death  of  decedent  and  age  at  death. 

2nd.    Eesidence. 

3rd.    Testacy  or  intestacy. 

4th.  Introduction  of  a  true  copy  of  will  and  codi- 
cils, or  table  of  heirship,  if  no  will. 

5th.  Did  decedent  leave  a  husband  or  wife  surviv- 
ing?   Age. 

6th.  Has  surviving  husband  or  widow  accepted  pro- 
visions of  will? 

7th.  Is  there  an  ante-nuptial  or  post-nuptial  con- 
tract or  contracts?    They  must  be  produced. 

8th.  Relationship  of  each  and  all  beneficiaries  to 
decedent,  tracing  such  relationship;  and  State  of 
incorporation  and  charter  powers  of  educational, 
religious  and  charitable  corporations. 

9th.  Ages,  as  of  death  of  decedent  of  all  annuitants 
and  tenants  for  life  or  years. 

10th.  Identification  of  the  total  real  estate  in  Illi- 
nois and  the  total  personal  or  mixed  property 
wheresoever  situate. 

11th.  Determination  by  witnesses  or  otherwise  of 
the  market  value  of  all  property  appraisable  and 
of  what  is  appraisable. 

12th.  No  steps  are  taken  as  to  value,  amount  or  de- 
scription of  property  until  an  inventory  is  filed 
in  a  court  of  probate.  The  Si:ate  can  force  exec- 
utor or  administrator  to  file  inventory.  238  111. 
203. 

13.    Gifts  and  transfers  under  Section  1. 

14th.  Legal  deductions,  which  include  debts  owing 
by  decedent  at  death,  secured  by  mortgage  or 
otherwise;  funeral  expense;  court  costs;  attor- 
ney's fees  in  administration;  estimated  executors' 
or  administrators'  commission.  Deductions  must 
be  itemized,  and  each  item  must  show  the  consid- 
eration for  the  debt  and  the  name  of  the  creditor. 
The  fact  that  a  claim  has  been  allowed  by  a  court 
of  probate  is  not  in  itself  ground  for  its  allowance 
in  an  inheritance  appraisement.  The  principal 
basis  for  allowance  is  that  the  deduction  claimed 
constituted  in  law  a  clear  liability  of  decedent  at 
death. 


338 

510.  Close  Corporation  Stock. 

If  there  are  no  reliable  sales  on  which  the  Appraiser 
may  base  a  value  of  close  corporation  or  unlisted  stock, 
a  statement  of  assets  and  liabilities  is  required,  which 
should  show  the  condition  of  company  at  decedent's 
death,  and  also  the  earnings  of  the  company  over  a  pe- 
riod of  years  prior  to  said  death.  These  statements  are 
generally  withdrawn  from  the  record  on  motion. 

As  an  appraisement  proceeds,  many  points  of  law 
arise.  These  should  not  be  discussed  during  the  trial, 
but  the  evidence  necessary  to  develop  the  facts  on  which 
to  base  the  legal  contentions  of  the  respective  parties 
should  alone  proceed.  After  the  evidence  is  closed,  it  is 
the  practice  in  Cook  County  to  argue  all  questions  of 
law  and  value  before  the  appraiser.  Whether  the  ap- 
praiser, under  the  Illinois  law,  can  determine  questions, 
other  than  those  of  value,  is  not  the  subject  of  judicial 
determination  in  this  state. 

511.  Record  of  Appraisement. 

The  evidence  at  the  hearings  of  the  appraiser  is  taken 
by  a  court  reporter  furnished  by  the  Inheritance  Tax 
Office.  The  evidence,  when  transcribed,  together  with  all 
exhibits,  is  delivered  to  the  appraiser  at  the  close  of  the 
hearings.  A  report  and  draft  order  of  tax  is  thereupon 
prepared  (see  forms)  and  left  with  the  tax  office,  for  the 
inspection  of  attorneys  for  the  different  parties.  Notice 
is  given  to  attorneys  by  mail  of  the  time  the  report  and 
order  is  ready  for  inspection. 

After  the  expiration  of  the  time  appointed  for  inspec- 
tion of  the  report,  the  same  is  presented  to  the  County 
Judge,  who  approves  same  ^'forthwith''  by  the  entry  of 
an  order  of  tax,  and  at  the  same  time  said  County  Judge, 


339 

pursuant  to  Section  11,  mails  his  notice  of  tax  to  all  in- 
terested parties.  The  form  of  notice  of  tax  used  in  Cook 
County,  which  is  mailed  by  the  County  Judge  when  he 
determines  the  tax,  shows  the  date  the  order  of  tax  was 
entered,  the  cash  value  of  the  beneficiaries'  estate,  and 
the  tax  assessed  thereon.  The  notice  further  states  that 
the  tax  draws  interest  until  paid.  This  provision  cov- 
ering interest  has  no  effect  on  taxes  paid  within  six 
months  from  the  death  of  decedent. 

Cash  value.  The  ^'cash  value''  of  beneficiaries'  estate 
has  always  been  considered  as  meaning  the  value  of  the 
succession  less  the  statutory  exemption.  Whether  this 
is  a  correct  interpretation  of  the  meaning  of  said  words, 
no  view  is  expressed  herein. 

512.  Objections  to  Appraiser's  Report  Cannot  Be 

Argrued  Before  County  Judge. 

If  there  are  objections  to  any  phase,  part  or  finding  of 
the  report  or  order  of  tax,  it  is  the  holding  of  the  County 
Judge  of  Cook  County  that  said  objections  cannot  be 
argued  prior  to  entering  the  order  of  tax.  (See  cases 
under  ** County  Judge.")  The  remedy  is  by  appeal  to 
the  County  Court,  from  the  County  Judge's  Order  of 
Tax.    (See  ** Appeal.") 

513.  Inventories — Good  Practice  in  Tax  Matters. 

The  rules  governing  the  filing  of  inventories  in  the 
Court  of  Probate  and  description  of  property  therein  is 
governed  by  the  administration  law  and  rules  of  said 
court. 

The  recommendations  herein  to  executors  and  admin- 
istrators and  their  counsel  is  by  way  of  suggestion  to 
avoid  delays  and  insure  prompt  action  in  inheritance  tax 
matters  only. 


340 

614.     Description  of  Property  in  Inventories. 

It  is  suggested  to  executors  and  administrators  that 
their  inventories  provide  descriptions  of  property,  in  ad- 
dition to  that  description  required  by  the  administration 
act,  and  the  rules  of  the  Court  of  Probate  (when  not  in 
contravention  of  said  rules),  as  follows: 

In  describing  real  estate,  give  frontage  and  depth;  if 
improved,  state  character  and  stories  high ;  rental  value ; 
street  number,  and  between  what  streets.  If  vacant, 
frontage  and  depth;  on  what  street;  between  what 
streets.  If  acres,  the  number  of  and  whether  subdivided ; 
how  many  lots.  If  property  customarily  measured  by 
the  square  foot,  give  number  of  square  feet. 

515.  Stocks. 

Certificate  number  and  number  of  shares  of  stock  rep- 
resented thereby;  the  correct  corporate  name  of  the  cor- 
poration without  abbreviation;  par  value  of  shares  and 
class  of  stock  (preferred,  first  or  second  preferred,  or 
common,  etc.). 

516.  Bonds. 

Correct  name  of  corporation;  serial  number  of  each 
bond;  class  or  kind  of  bond;  par  value;  maturity,  date 
of  payment  and  rate  of  interest. 

The  foregoing  information  will,  many  times,  save  de- 
lay in  determining  the  facts  and  values. 

517.  Insures  Immediate  Consent  to  Transfer. 

The  description  of  stocks  and  bonds  as  above  in  an 
inventory  on  which  a  tax  has  been  paid,  or  on  which  a 
No  Tax  Order  has  been  entered  will  insure  an  immediate 
issuance  under  Section  9  of  the  consent  of  the  Attorney 


341 

General  and  State  Treasurer  to  transfer  the  same.  K 
the  shares  of  stock  and  bonds  have  been  described  in  the 
inventory  without  numbers,  no  consents  can  issue  until 
an  aflfidavit  is  filed  with  the  tax  office  identifying  the 
property  by  certificate  or  serial  numbers,  as  the  same 
on  which  the  tax  has  been  paid  or  declared  free  from 
lien. 

518.  Appraiser  —  Involuntary  Appointment  —  In- 

vestigation by  Tax  Office. 

If  no  action  is  taken  by  the  legal  representatives  or 
beneficiary  of  property,  either  by  referring  the  matter  to 
the  Inheritance  Tax  Attorney  or  by  petitioning  the 
County  Judge,  the  estate  or  property  is  investigated  by 
the  tax  office  through  its  investigation  department. 

The  records  of  the  Probate  Court,  recorder's  office  and 
the  files  in  the  office  of  the  joint  representative  of  the 
Attorney  General  and  State  Treasurer  are  examined,  as 
well  as  other  investigations  made,  and  the  value  of  prop- 
erty discovered  is  tentatively  determined,  and  if  a  tax  is 
disclosed  the  case  is  referred  to  the  County  Judge  for 
disposition. 

Few  investigations  are  completed  within  the  discount 
period.  Voluntary  appraisement  and  deposit  cases  are 
heard  first  on  the  appraisers'  trial  calendar.  Involun- 
tary cases  are  placed  at  the  foot  of  the  calendar. 

519.  Life   Estates   and   Remainders— How   Value 

Determined. 

The  Appraiser,  after  determining,  as  by  law  directed, 
the  value  of  the  property,  by  practice,  passes  upon,  by 
way  of  recommendation  the  deductions  presented,  the  de- 
volution or  distribution  of  the  net  property  for  taxation, 
the  exemptions  and  rates  of  tax ;  and  where  life  estates.. 


342 

terms  of  years,  remainders  and  annuities  are  created,  the 

Appraiser  determines  the  value  as  of  the  death  of  tes- 
tator.   The  value  of  an  estate  or  annuity  for  life  or  years 

is  determined  on  mortality  tables.  The  Carlisle  Table 
of  Mortality,  which  follows,  being  the  one  used,  according 

to  practice.    (Marshall  v.  Marshall,  252  111.  568.) 

520.  Value  of  an  Annuity  of  One  Dollar  on  a  Sln« 
gle  Life  According  to  the  Carlisle  Table  of 
Mortality. 

AGE.     bfo                AGE.     5%  AGE.     5%, 

1 . . . .  13.995    31 .... .  14.617    61 8.712 

2 14.983    32 ....  14.506    62 8.487 

3 15.824    33 ... .  14.387    63 8.258 

4 16.271    34. . .  .14.260    64 8.016 

5 . . . .  16.590    35 14.127    65 7.765 

6. . . .  16.735    36 13.987    66 7.503 

7 . . . .  16.790    37 ... .  13.843  67 .... .  7.227 

8 . . . .  16.786    38 ....  13.695    68 6.941 

9. . .  .16.742    39. . .  ,13.542    69 6.643 

10 16.669    40. . .  .13.390    70 6.336 

11 ... .  16.581    41 ... .  13.245    71 6.015 

12 16.494    42 ... .  13.101    72 5.711 

13 ... .  16.406    43 ... .  12.957    73 5.435 

14 ... .  16.316    44 12.806    74 5.190 

15. . .  .16.227    45. . .  .12.648    75 4.989 

16 ... .  16.144    46 ... .  12.480    76 4.792 

17 ... .  16.066    47 ... .  12.301    77 4.609 

18 15.987    48 ... .  12.107    78 4.422 

19 ... .  15.904    49 ... .  11.892    79 4.210 

20 ... .  15.817    50 ... .  11.661    80 4.015 

21 ... .  15.726    51 ... .  11.410    81 3.799 

22. . .  .15.628    52 11.154    82 3.606 

23 ....  15.525    53 10.892    83 3.406 

24 15.417    54. . .  .10.624  84. . . .  .3.211 

25 ... .  15.303         55 ....  10.347         85 3.009 

26 15.187         56 ... .  10.063         86 2.830 

27....  15.065  57....  9.771         87 2.685 

28....  14.942         58....  9.478         88 2.597 

29 14.827         59....  9.199         89 2.495 

30. . .  .14.723         60. . . .  8.940         90 2.339 


343 


AGB. 

5% 

91.... 

2.321 

92. . . . 

2.412 

93. . . . 

2.518 

94.... 

2.569 

95. . . . 

2.596 

96. . . . 

2.555 

97. . . . 

2.428 

98. . . . 

2.278 

99.... 

100. . . . 

,  1.624 

521.     Hoxir  to  Ascertain  Present  Value  of  Annuity 
or  Estate  for  Life — And  Remainder. 

If  A,  age  fifty  years,  i&  given  a  life  estate  in  property 
of  the  value  of  $10,000.00,  remainder  to  B,  the  method  of 
valuation  of  the  life  estate  and  remainder  is  as  follows : 

First  is  determined  the  income  for  one  year  at  five  per 
cent,  which  equals  $500.00.  By  reference  to  the  mortal- 
ity table,  it  is  seen  that  the  present  value  of  One  Dollar 
for  the  entire  expectancy  of  life  of  a  person  fifty  years 
of  age  (A*s  age)  is  $11.66.  It  follows  that  if  the  present 
value  of  $1.00  for  A's  expectancy  is  $11.66,  the  present 
value  of  $500.00  per  year  for  A's  expectancy  is.  5iOOX 
$11.66,  or  $5,830.00.  $5,830.00  is  therefore  the  present 
taxable  value  of  A's  life  estate  in  property  of  the  value 
of  $10,000.00. 

The  present  value  of  B  's  remainder  as  of  the  death  of 
testator  is  the  difference  between  A's  life  estate  and  the 
value  of  the  trust  fund  ($10,000— $5,830=44,170.00). 

$4,170.00  is  the  taxable  value  of  B's  remainder.  (See 
People  V.  Nelms,  241  HI.  571.) 

The  rate  of  five  per  cent,  is  provided  by  Sec.  2,  L.  1909, 
as  the  percentage  basis  for  determining  the  value  of  ex- 
pectancies or  annuities.  . 


344 

522.  Valuation  of  Annuity  for  a  Fixed  Period  of 

Years. 

When  an  annuity  is  created  for  a  fixed  period  of  years, 
for  instance — annuity  of  $500  to  0  for  ten  years,  the  mor- 
tality tables  are  of  no  assistance  and  cannot  be  used. 
The  Appraiser  mnst  then  use  a  fixed  annuity  table. 

To  determine  the  value  of  a  fixed  annuity  for  a  period 
of  years  stated,  it  is  necessary  only  to  find  the  present 
value  of  money  for  a  certain  period  without  regard  to 
mortality.  The  fixed  annuity  will  not  cease  with  C's 
death,  but  the  life  es.tate  would. 

The  fixed  annuity  table  used  in  determining  an  annuity 

as  last  described  is  as  follows : 

IiiLusTEATioN :  Annuity  of  $500.00  to  C  for  ten  years. 
Present  value  of  $1.00  per  year  for  ten  years  is 
found  by  referring  to  the  following  table  to  be 
$7.7217.  Multiply  the  total  annuity  ($500.00)  by 
the  present  value  of  $1.00  (7.7217)  and  the  result 
is  the  present  value  of  $500.00  for  ten  years,  viz : 
5O0x$7.7217=$3,608.5O. 

523.  Fixed  Annuity  Table. 

Yrs.  5  per  cent.  Yrs.  5  per  cent. 

1  .9524      16       10.8378 

2  1.8594  17  11.2741 

3  2.7232  18  11.6896 

4  3.5460  19  12.0853 

5  4.3295  20  12.4622 

6  5.0757  21  12.8212 

7  5.7864  22  13.1630 

8  6.4632  23  13.4886 

9  7.1078  24  13.7986 

10  7.7217  25  14.0939 

11  8.3064  26  14.3752 

12  8i.8633  27  14.6430 

13  9.3936  28  14.8981 

14  9.8986  29  15.1411 

15  10.3797      30       15.3725 


345 

Yrs.  5  per  cent.  Yrs.  5  per  cent. 

31  15.5928  56  18.6985 

32  15.8027  57  18.7605 

33  16.0025  58  18.8195 

34  16.1929  59  18.8758 

35  16.3742  60  18.9293 

36  16.5469  61  18.9803 

37  16.7113  62  19.0288 

38  16.8679  63  19.0751 

39  17.0170  64  19.1191 

40  17.1591  65  19.1611 

41  17.2944  66  19.2010 

42  17.4232  07  19.2391 

43  17.5459  68  19.2753 

44  17.6628  69  19.3098 

45  17.7741  70  19.3427 

46  17.8801  71  19.3740 

47  17.9810  72  19.4038 

48  18.0772  73  19.4322 

49  18.1687  74  19.4592 

50  18.2559  75  19.4850 

51  18.3390  76  19.5095 

52  18.4181  77  19.5329 

53  18.4934  78  19.5551 

54  18.5651  79  19.5763 

55  18.6335  80  19.5965 

524.     Appeal  to  County  Court. 

''Any  person  or  persons  dissatisfied  \;rith  the 
appraisement  or  assessment  may  appeal  there- 
from to  the  County  Court  of  the  proper  county 
Tirithin  sixty  days  after  the  making  and  filing 
of  such  appraisement  or  assessment  on  paying 
or  giving  security  satisfactory  to  the  County 
Judge  to  pay  all  costs,  together  with  whatever 
taxes  shall  be  fixed  by  said  Court." 

**The  making  of  such  assessment*'  is  accomplished  by 
the  entry  of  the  County  Judge's  order  of  tax  approv- 
ing the  Appraiser's  report  and  fixing  the  tax.  The  prac- 
tice is  for  the  party  appealing  to  present  a  petition  (see 


346 

forms)  to  the  County  Judge,  setting  up  the  objections 
to  the  appraisement  and  County  Judge's  order,  upon 
which  petition  the  court  allows  the  appeal  if  pertinent 
objections  are  alleged. 

At  the  same  time  a  bond  (see  forms)  in  twice  the  sum 
of  the  tax  is  presented  for  approval,  unless  the  tax  has 
been  paid  to  the  County  Treasurer,  in  which  case  the 
bond  is  usually  in  the  sum  of  $250.00  to  cover  costs. 

Sureties  should  be  brought  into  court  for  examination 
at  the  time  of  presenting  bond.  The  County  Court  of 
Cook  County  has  held  that  the  date  of  entry  of  the 
County  Judge's  order  of  tax  is  the  time  the  sixty  day 
limitation  for  appeal  begins  and  also  that  the  bond  must 
be  approved  within  this  period. 

An  appeal  case  in  the  County  Court  is  a  common  law 
action.  Exceptions  must  be  preserved  and  the  proced- 
ure is  the  same  as  law  actions.  The  trial  ia  de  novo 
{People  V.  Mills,  24:1  111.  620). 

525.     Appraisers'  Report  Used  as  Evidence. 

In  the  average  appeal,  the  Appraiser's  report  sets 
forth  all  the  material  facts,  and  the  same,  or  a  certified 
copy,  is  offered  as  the  only  evidence. 

A  copy  of  the  report  should  be  used  whenever  the 
case  goes  to  the  Supreme  Court.  The  original  report  is 
not  recorded  and  should  be  kept  in  the  clerk's  office,  as 
it  may  contain  information  for  a  future  appraisement 
of  property  passing  by  a  power  or  otherwise,  which 
might  be  indispensable  to  the  State.  Although  the  law 
allows  withdrawing  the  Supreme  Court  record  contain- 
ing this  report,  it  is  better  available  in  the  office  of  the 
Clerk  of  the  County  Court. 

Either  side  may  produce  witnesses  to  prove  material 
facts  not  contained  in  the  Appraiser's  report,  or,  if  a 


347 

question  of  value  is  in  dispute,  the  report  may  be  offered 
and  the  objectionable  parts  either  excluded  or  received 
subject  to  objection. 

Where  the  report  can  be  used  as  covering  all  the  for- 
mal proof,  it  is  a  great  saving  of  time  to  the  Court  to 
receive  same  or  a  copy  thereof  and  mark  the  objection- 
able or  disputed  parts  as  received  under  objection. 

Where  the  report  is  to  be  used  as  evidence,  appellant 
in  opening  the  appeal  case,  begins  his  record  by  offering 
the  report,  or  so  much  as  is  necessary,  with  leave  to 
withdraw  on  substitution  of  an  authenticated,  examined 
or  certified  copy.  If  the  regularity  of  Appraiser's,  ap- 
pointment is  questioned  the  order  of  appointment  and 
oath  of  Appraiser  may  be  material.  The  order  of  tax 
appealed  from  is  a  matter  of  record.  Opinions  differ  on 
the  necessity  of  offering  the  same  as  evidence.  The  bet- 
ter opinion  seems  to  be  that  it  is  primarily  a  part  of  the 
record.    The  trial  proceeds  as  in  other  suits  at  law. 

526.     Appeals  to  Supreme  Court. 

An  appeal  from  the  judgment  of  the  County  Court  in 
an  Inheritance  Tax  case  goes  direct  to  the  Supreme 
Court.  (Re  Sholem,  238  111.  203.)  The  rules  and  pro- 
cedure governing  such  appeals,  are  the  same  as  in  suits 
at  law. 


348 

527.  When  any  person  interested  in  any  property 

in  this  state,  ivhich  shall  have  been  trans- 
ferred within  the  meaning  of  this  act  shall 
deem  the  same  not  subject  to  any  tax  under 
this  act,  he  may  file  his  petition  in  the 
County  Court  of  the  proper  county  to  de- 
termine whether  said  property  is  subject 
to  the  tax  herein  provided,  in  which  peti- 
tion the  County  Treasurer  and  all  persons 
know^n  to  have  or  claim  any  interest  in  said 
property  shall  be  made  parties.  The  Coun- 
ty Court  may  hear  the  said  cause  upon  the 
relation  of  the  parties  and  the  testimony 
of  w^itnesses,  and  evidence  produced  in 
open  court,  and,  if  the  court  shall  find  said 
property  is  not  subject  to  any  tax,  as  here- 
in provided,  the  court  shall,  by  order,  so 
determine:  but  if  it  shall  appear  that  said 
property,  or  any  part  thereof,  is  subject  to 
any  such  tax,  the  same  shall  be  appraised 
and  taxed  as  in  other  cases.  An  adjudica- 
tion by  the  County  Court,  as  herein  pro- 
vided, shall  be  conclusive  as  to  the  lien  of 
the  tax  herein  provided  upon  said  prop- 
erty, subject  to  appeal  to  the  Supreme 
Court  of  the  state  by  the  County  Treasurer, 
or  Attorney  General  of  the  state,  in  behalf 
of  the  people,  or  by  any  party  having  an 
interest  in  said  property.  The  fees  and  costs 
in  all  cases  arising  under  this  section  shall 
be  the  same  as  are  now  or  may  hereafter 
be  allow^ed  by  law  in  cases  at  law  in  the 
County  Court. 

528.  Proceeding  to  Quiet  Question  of  Taxability— 

In  General. 

It  is  frequently  uncertain  or  disputable  whether  a  tax 
is  due  or  has  accrued  to  the  State.  This  uncertainty 
should  be  eliminated  at  once,  so  that  the  property  trans- 
ferred may  be  commercially  or  merchantably  clear,  either 


349 

T>y  determining  the  amount  of  the  tax,  if  any,  and  the 
payment  of  same,  or,  by  an  adjudication  finding  that 
there  is  no  tax. 

This  uncertainty  is  caused  by  manifold  questions,  both 
of  law  and  fact,  nearly  all  of  which  grow  out  of  the  ques- 
tion whether  the  value  of  the  property  is  less  or  more 
than  the  statutory  exemptions,  of  the  beneficiaries.  To 
settle  this  basic  proposition,  it  is  necessary,  among  other 
things — 

1st.  To  construe  the  will,  interpret  a  deed  or  trust  or 
other  transfer,  determine  the  heirship,  etc.,  ascer- 
tain who  are  the  beneficiaries  and  what  amounts  or 
proportions  they  legally  receive,  and  if  there  are 
contingent  interests  created,  whether  Section  25 
operates  to  make  an  arbitrary  distribution  for  taxa- 
tion at  the  highest  rate,  or  whether  by  the  creation 
of  a  power  of  appointment,  it  may  be  necessary  to 
postpone  the  determination  of  a  tax. 

2nd.  It  is  not  always  clear  whether  the  statutory  ex- 
emption is  allowable — as  in  the  case  of  a  claim  that 
decedent  stood  in  the  acknowledged  relation  of  par- 
ent to  the  benficiary. 

3rd.  Eesidence;  date  of  death;  and  the  meaning  of 
*  ^  Property  in  this  State ' '  are  material. 

4th.  Determination  of  the  fair  market  value  of  the 
real  or  personal  property  presents  problems  for  so- 
lution. 

The  many  situations  that  may  arise  cannot  be  antici- 
pated. 

There  are  apparently  two  methods  offered  by  the  Inher- 
itance Tax  Law  to  quiet  the  question  of  tax  liability  and 
liens — ^^Section  23  and  Section  11. 

A  letter  from  a  State  or  County  oiB&cer  giving  an  opin- 
ion that  no  tax  is  due  is  of  no  legal  effect.  The  only 
determination  of  the  question  is  by  order  of  the  County 
Judge  or  Court. 


350 

In  1901  there  was  added  to  the  Law  of  1895  what  is 

known  as  Section  21^  which  was   without   substantial 

change  incorporated  in  the  Law  of  1909  as  Section  23. 

It  provides  in  part,  as  follows: 

*'When  any  person  interested  in  any  property  in 
this,  State  which  shall  have  been  transferred  within 
the  meaning  of  this  Act  shall  deem  the  same  is  not 
subject  to  any  tax,  he  may  file  a  petition  in  the 
County  Court  of  the  proper  County  and  such  Court 
shall  determine  whether  there  is  or  is  not  a  tax. ' ' 

The  County  Treasurer  shall  be  made  a  party  and  the 
Attorney  General,  who  is  not  expressly  made  a  party, 
may  appeal  from  the  judgment  of  the  Court;  in  case 
there  is  no  tax  the  Court  may  so  decree. 

The  apparent  intent  of  this  Section  is,  among  other 
things,  to  foreclose  the  State,  by  the  entry  of  a  *^no  tax'' 
judgment  from  forever  raising  the  question  of  taxabil- 
ity of  the  property  and  subject  matter  adjudicated.  The 
County  Treasurer,  under  this  Section,  is  intended  to  be 
designated  as  the  representative  of  the  State. 

A  large  number  of  cases  have  been  commenced  under 
this  section,  in  which  no  tax  orders  have  been  entered, 
and  the  practice,  procedure,  form  petition  and  decree  of 
No  Tax  are  hereinafter  given. 

529.     The    Other    Section    Providing    Remedy    to 
Quiet  Question  of  Taxability. 

There  is  another  section  which  affords  the  remedy  con- 
templated in  Section  23;  that  is  Section  11*  wherein  the 


♦It  is  the  author's  personal  view  that  Section  11  offers  a  much 
safer  and  more  certain  remedy  to  secure  the  foreclosure  of  the  State 
on  the  question  of  taxability  and  lien  than  Section  23.  Although  a 
proceeding  under  Section  11  may  be  more  expensive,  by  reason  of  the 
County  Judge  refusing  to  act  where  a  tax  is  not  apparently  due,  be- 
cause the  appraiser's  services  are  payable  only  out  of  the  tax  collected 
in  the  particular  appraisement,  yet  the  object  of  the  moving  party  is 
to  secure  an  irrefragable  clearance  of  tax  liens  or  liabilities,  and  an 
additional  but  inconsiderable  expense  on  account  of  costs  might  be 
wisely  incurred. 


351 

County  Judge,  by  a  legal  procedure  wHch  has  the  pres- 
tige of  judicial  interpretation,  appoints  an  appraiser,  on 
whose  report,  the  said  County  Judge  determines  whether 
there  is  or  is  not  a  tax. 

530.  Procedure  for  Determining  Taxability  Un- 

der Section  11. 

The  procedure  for  determination  of  taxability,  and  se- 
curing a  no  tax  order,  under  Section  11  is  the  same  as 
the  procedure  for  assessing  a  tax,  with  the  exception  that 
a  guaranty  is  required  of  the  moving  party  to  pay  the 
costs  of  the  proceeding.  Costs  must  be  guaranteed 
where  it  is  not  clear  that  there  is  a  tax,  in  order  to  insure 
payment  of  the  appraiser  and  his.  necessary  disburse- 
ments. 

531.  Section  23.    Property  "in  This  State.'» 

This  covers  all  property  of  whatsoever  kind,  construc- 
tively or  tangibly  within  this  state  (see  cases  under  Sec- 
tion 1  for  decisions),  whether  owned  by  a  resident  or 
non-resident  of  this  state.  Property  that  is  compre- 
hended within  the  meaning  of  Section  1  would  be  within 
Section  23,  as  well  as  property  covered  by  Section  9. 

532.  Transferred  Within  the  Meaning    of    This 

Act. 

The  meaning  of  the  phrase  *^ property  in  this  state'' 

or  *^ within  this  state''  is  interpreted  in  People  v.  Griffith, 

245  111.  532  (decision  under  Law  of  1895),  as  follows:, 

*^The  succession  to  the  ownership  of  property 
being  by  permission  of  the  state,  the  state  can  im- 
pose conditions  in  granting  such  privilege  or  per- 
'mission.  The  Courts  therefore  have  upheld  the  im- 
position of  an  Inheritance  Tax  whenever  the  state 
has  jurisdiction  of  the  beneficiary  or  the  subject 
matter,  regardless  of  the  actual  location  of  the  per- 


352 

sonal  property  or  the  domicile  of  the  decedent.  *  *  • 
The  liability  of  property  to  an  inheritance  tax  does 
not  depend  upon  the  location,  but  upon  whether  the 
beneficiary  came  into  its  possession  through  the  ex- 
ercise of  a  privilege  conferred  by  the  State'*. 

In  National  Safe  Deposit  Company  v.  Stead,  Attorney 

General,  250  lU.  584*,  the  Court  said: 

*^It  is  clear,  therefore,  that  the  State  has  an  in- 
terest in  every  estate  that  is  subject  to  the  payment 
of  an  inheritance  tax,  and  in  all  such  proceedings 
the  Attorney  General  or  some  other  designated  offi- 
cer, is  the  representative  of  the  State.  {People  v. 
Sholem,  238  111.  203).  We  think,  therefore,  that  the 
conclusion,  from  what  has  been  said,  logically  and 
necessarily  follows  that  where  a  lessee  of  the  appel- 
lant dies  leaving  property  in  one  of  the  safety  de- 
posit boxes  or  safes  of  the  appellant,  the  State,  by 
its  proper  representative,  has  the  right  to  be  ad- 
vised whether  or  not  it  shall  ultimately  be  estab- 
lished that  it  has  an  interest  in  such  property  and  of 
the  time  when  the  property  will  be  surrendered  and 
delivered  by  the  appellant  to  the  personal  represent- 
ative, heir  or  devisee  of  the  decedent,  for  the  pur- 
pose of  being  informed  as  to  whether  the  succession 
to  such  property  is  subject  to  an  inheritance  tax. 
If  such  were  not  held  to  be  the  law,  all  moneys,  se- 
curities or  other  valuables  held  by  appellant  in  its 
safety  deposit  boxes  or  safes  for  its  lessees,  upon 
the  death  of  a  lessee  might  be  transferred  to  parties 
other  than  the  State  or  its  representatives  and  im- 
mediately removed  to  a  foreign  state  or  country  or 
concealed  or  otherwise  disposed  of,  and  the  true 
owner  of  the  property — in  part,  that  is,  the  State — 
be  deprived  of  all  right  to  enjoy  the  use  and  posses- 
sion of  such  property''. 

533.     Interested  Party. 

An  interested  party  may  be  the  administrator,  exec- 
utor, trustee,  heir,  beneficiary,  transferee,  donee,  pur- 
chaser, Attorney  General  or  Inheritance  Tax  Attorney. 


♦Writ  of  Error  to  United  States  Supreme  Court. 


353 

534.  Petition — Form — ^Allegations  —  Proof  Under 

Section  23. 

The  requirements  of  the  County  Court  are  that  all 
facts  material  of  proof  in  a  no  tax  proceeding  under 
Section  23  shall  be  alleged  or  negatived  in  a  petition, 
the  prayer  of  which  is  for  a  judgment  of  no  tax.  The 
allegations  must  be  set  forth  in  systematic  order.  A 
form  petition  showing  general  allegations,  and  the  order 
in  which  they  occur,  is  hereinafter  set  forth  for  the  use 
of  parties  electing  to  proceed  under  said  section. 

535.  Description  of  Property  in  Copy  of  Inventory 

Made  a  Part  of  Petition. 

All  real  estate  should  be  described  (in  addition  to  the 
legal  description)  by  street  numbers,  if  any — and  the 
frontage  and  depth  of  lot,  improvements  and  income 
must  be  shown.  If  not  contained  in  the  inventory,  a  state- 
ment referring  to  the  inventory  item  giving  such  infor- 
mation must  be  attached  to  the  petition. 

Shares  of  stock  and  bonds  must  be  described  by  cer- 
tificate and  serial  numbers. 


354 

536.     Form  Petition  for  No  Tax. 

State  of  Illinois  ^ 
County  of  Cook    f  ^^ 

In  the  County  Court  of  Cook  County. 
To  THE Term  of  Said  Court. 

In  the  Matter  of  the  Estate  of 

John  Doe,  deceased. 
No 

Petition  for  no  Tax. 
To  the  Honorable  John  E.  Owens,* 

Judge  of  the  County  Court  of  Cook  County. 

Your  petitioners,  George  Doe  and  Charles  Brown, 
as  executors,  by  John  Smith,  their  attorney,  respect- 
fully show  unto  your  Honor  that  said  John  Doe  de- 
parted this  life  testate  on  the  10th  day  of  May,  A.  D. 
1909,  a  resident  of  the  City  of  Chicago,  County  of 
Cook  and  State  of  Illinois ;  that  the  will  and  codicils 
of  said  decedent  have  been,  without  objection,  (or 
if  objection  has  been  made  to  probate  or  otherwise, 
state  the  facts),  duly  admitted  to  probate  in  the 
Probate  Court  of  Cook  County,  Illinois,  and  that 
your  petitioners  qualified  thereunder  as  executors 
and  are  now  acting  as  such.  A  true  copy  of  said  last 
will  and  codicils  are  hereto  attached,  marked  Ex- 
hibit ^^A'*  and  made  a  part  of  this  petition. 

Your  petitioner  further  shows  unto  your  Honor 
that  the  decedent  died  possessed  of  personal  prop- 
erty and  rights  and  interests  therein  tangibly  situate 
in  the  States  of  Illinois,  New  York,  Pennsylvania, 
California,  Iowa  and  Floroda,  all  of  said  personal 
property  is  specifically  described  in  amount  and 
kind  in  an  inventory  filed  by  executor  in  the  Probate 
Court  of  Cook  County,  Illinois ;  a  copy  of  which  is 
herewith  attached  to  this  petition  as  Exhibit  **B'^ 
and  made  a  part  thereof;  that  said  decedent  died 


♦Judge   of  the  County  Court  of  Cook  County — elected  November. 
1910. 


355 

seized  of  real  estate  situate  in  tlie  states  of  Wis- 
consin and  Illinois;  a  description  of  the  real  estate 
situate  in  the  State  of  Illinois  is  specifically  set 
forth  in  said  inventory  heretofore  referred  to.  Your 
Petitioner  deposes  that  Exhibit  **B''  contains  a 
complete  list  and  description  of  all  real  estate  locat- 
ed in  the  State  of  Illinois  of  which  decedent  was 
seized  at  the  time  of  death,  and  that  it  further  con- 
tains a  complete  list  and  description  of  all  personal 
property,  rights  and  interests  therein  and  evi- 
dences thereof,  wherever  located,  of  which  decedent 
died  possessed. 

Your  Petitioner  further  represents  that  the  total 
value  of  the  real  estate  in  Illinois  does  not  exceed 
$74,000.00 ;  and  that  the  total  gross  value  of  all  per- 
sonal property,  interests  and  rights  and  credits  does 
not  exceed  $6,000.00,  making  a  total  gross  estate  of 
$80,000.00. 

That  the  real  estate  in  Illinois  was  chargeable  at 
the  time  of  death  of  decedent  with  a  total  mortgage 
indebtedness  of  $3,000.00,  distributed  upon  the  prop- 
erty as  set  forth  in  said  Exhibit  ^^B'\  That  the 
other  indebtedness  of  decedent  owing  at  death 
is  as  follows :  $2,000.00  borrowed  by  decedent  from 
the  Central  National  Bank  of  Chicago,  and  evi- 
denced by  decedent  ^s  note  for  that  amount.  The 
foregoing  indebtedness  is  admitted  to  be  due  by  ex- 
ecutors and  will  be  paid. 

There  will  also  be  incurred  the  general  charge  of 
administration  fees  and  costs,  together  with  execu- 
tors' and  attorney's  fees,  which  your  Petitioner  has 
not  estimated  but  prays  may  be  computed  if  your 
Honor  deems  it  necessary  to  arrive  at  a  more  cor-^ 
rect  amount  of  the  net  distribution  of  the  estate. 
(Funeral  expense  is  deductible  as  well  as  household 
bills,  etc.,  unpaid  at  death — but  must  be  itemized  if 
claimed  as  a  deduction). 

Your  petitioner  further  represents  that  the  debts 
above  described  should  be  deducted  as  follows: 
$2,000.00  from  the  gross  personal  estate,  leaving 
$4,000.00  for  distribution;  $3,000.00  from  the  gross 
value  of  real  estate,  leaving  $71,000.00  for  distribu- 
tion or  a  total  of  $75,000.00  net  assets. 


356 

Your  petitioner  further  shows  that  said  decedent 
left  him  surviving  as  his  only  heirs  at  law  and  next 
of  kin,  Mary  Doe,  his  widow,  who  was  thirty-five 
years  of  age  at  the  date  of  decedent's  death;  George 
Doe  twenty-two  years  of  age,  and  Margaret  Doe, 
fourteen  years  of  age,  children  of  said  decedent, 
which  facts  are  further  shown  by  proof  of  heirship 
made  in  the  Probate  Court  of  Cook  County,  a  copy 
of  the  Table  of  Heirship  being  hereto  attached  and 
marked  Exhibit  ^^C  and  made  a  part  of  this  pe- 
tition. 

(If  decedent  adopted  any  child  or  children,  so 
state  and  attach  copy  of  decree  of  adoption). 

That  said  widow  (who  has  accepted  the  will)  and 
children  are  now  living  and  take  as  beneficiaries  un- 
der the  will  and  codicils  in  the  amounts  as  herein- 
after stated. 

(If  children  of  an  adopted  child  of  decedent  take 
property,  trace  their  relationship  by  referring  to 
the  adoption  of  beneficiary's  parents). 

Your  petitioner  further  represents  that  the  cash 
legacies  exceed  the  net  personal  property,  but  that 
by  the  terms  of  the  codicil  said  legacies  are  charge- 
able to  the  real  estate. 

Your  petitioner  further  shows  that  all  the  surviv- 
ing beneficiaries  named  in  the  will  and  codicils  suc- 
ceeding to  the  property  hereinabove  referred  to, 
together  with  their  respective  legal  relationships  to 
decedent  and  the  value  of  their  respective  succes- 
sions are  as  follows: 

(The  relationship  must  be  carefully  traced  when 
beneficiary  is  further  removed  than  father,  mother, 
brother,  sister,  widow,  husband  and  children. 


357 


Value  of        Statutory 
Succession.   Exemption.       Tax. 

Maey  Doe,  widow  of  decedent,  age  35. 
By  third  clause  of  will,  life  estate  in 
undivided  one-third  of  real  estate, 
present  value  $12,185.29 

Award 1,000.00 

Fifth   clause  of  will,   one-half 

of  personal  property 1,500.00 

$14,685.29       $20,000.00        None 

George  Doe,  son  of  decedent,  by  Sixth 
clause  of  will,  one-half  of  personal 
property $  1,500.00 

One-half  of  residue 14,707.36 

16,207.36        20,000.00        None 

Maegaeet  Doe,  daughter  of  decedent,  by 

residuary  clause,  one-half  of  residue.  14,707.35        20,000.00        None 

Augustus  Doe,  brother  of  decedent,  by 
Sixth  clause  and  Second  clause  of 
first  codicil 10,000.00        20,000.00        None 

Charles  Doe,  nephew  of  decedent,  being 
son  of  Henry  Doe,  brother  of  dece- 
dent, by  Seventh  clause  and  second 
codicil 2,000.00  2,000.00        None 

Grace  Mohr,  grandniece  of  decedent,  be- 
ing daughter  of  Alice  Mohr,  who  was 
the  daughter  of  Katherine  Wood,  a 
sister  of  decedent,  by  second  codicil 
(In  case  of  intestacy  show  death  of 
Alice  Mohr  and  Katherine  Wood)...     2,000.00  2,000.00        None 

John  Glass,  stranger  in  blood,  first  co- 
dicil          400.00        None 

The  Old  People's  Home,  a  corporation 
organized  under  the  laws  of  Illinois 
for  charitable  purposes  and  without 
the  right  to  make  dividends  or  dis- 
tribute profits  or  assets  among  its 
members,  trustees  or  shareholders. 
By  ninth  clause  of  will,  as  increased 

by  fourth  clause  of  second  codicil . .     5,000.00  Exempt    under    Sec. 

2^,  L.  1895,  if  tes- 
tator died  before 
July  1,  1909,  or  Sec. 
29,  if  testator  died  on 
or  after  July  1,  1909. 

Dorothy  Doe,  administratrix  of  the  es- 
tate of  William  Doe,  a  brother  of  de- 
cedent, and  beneficiary  under  the 
tenth  clause  of  will  of  decedent. 
William  Doe  survived  decedent,  but 
died  on  June  1st,  1909,  intestate. 
Letters  having  been  issued  to  his 
widow,   Dorothy   Doe 10,000.00        20,000.00        None 

Total $75,000.00 


358 

Your  Petitioner  further  states  that  Jacob  Doe 
named  in  the  twelfth  paragraph  of  will  died  prior 
to  death  of  decedent. 

Your  Petitioner  further  states  that  said  decedent 
was  actively  engaged  in  the  retail  hardware  business 
up  to  his  last  illness,  which  lasted  some  three  months 
until  death;  the  immediate  cause  of  death  being  di- 
agnosed as  Brights  Disease,  from  which  he  had  suf- 
fered intermittently  during  the  last  ten  years  of  his 
Hfe. 

That  within  thirty  days  of  his  death,  while  suffer- 
ing as  aforesaid,  he  made  a  gift  of  $10,000.00  to  his 
sister,  Amanda  Doe,  who  is  not  a  beneficiary  under 
his  will,  but  other  than  this  gift,  said  decedent  did 
not  during  life,  and  while  sick  or  injured,  make  any 
gift  or  gifts  of  money  or  property  (real  or  personal) 
or  any  interest  therein. 

(In  case  decedent  made  a  gift  while  sick,  allege 
all  the  facts). 

(In  case  decedent  made  no  gifts,  negative  the  fact 
in  the  language  of  this  paragraph  beginning  with 

the  word  said  *^ decedent''  in  the line  there- 

of). 

Your  petitioner  further  states  that  said  decedent 
did  by  warranty  deed  dated  June  1st,  1896,  transfer 
to  his  brother  Michael  Doe,  a  two-story  frame  cot- 
tage at  46  Blank  Street,  worth  now  $2,500.00,  from 
which  decedent  received  the  rents  until  his  death. 
Michael  Doe  is  not  a  beneficiary  in  the  will  or  codi- 
cils ;  but  other  than  this,  said  decedent  did  not  dur- 
ing life  transfer,  assign  or  part  with  any  money  or 
property  (real  or  personal)  or  any  interest  therein, 
reserving  any  part  thereof  or  income  therefrom  un- 
til death;  nor  did  he  indirectly  receive  any  income 
or  rewards  from  any  such  transfer.  (In  case  dece- 
dent made  a  transfer  or  transfers  in  his  lifetime, 
even  though  he  lost  all  title  and  ownership  in  the 
property  transferred,  but  that  he  decedent,  re- 
ceived rewards,  income  or  interest  from  said  prop- 
erty or  from  the  transferee,  whether  by  written 
agreement  or  oral  arrangement,  you  are  bounden 
under  the  rules  of  the  Court  to  set  forth  fully  the 
true  facts  for  the  Court's  consideration). 


359 

(In  case  decedent  made  no  transfers,  negative 
the  fact  in  the  language  used  in  this  paragraph,  be- 
ginning with  the  words  '^said  decedent**  in  the 
line  thereof). 

(Do  not  join  the  gift  and  transfer  paragraphs  in 
one.  They  are  separate  subject  matters  and  should 
be  covered  in  separate  paragraphs). 

Your  petitioner  therefore  prays  that  Your  Honor 
will  enter  an  order  herein  finding  that  the  property, 
real,  personal  and  mixed,  passing  to  the  benefici- 
aries under  the  will  and  codicils  of  the  said  dece- 
dent and  the  transfers  and  gifts  made  in  his  life- 
time, is  and  are  not  liable  for  any  inheritance  tax 
under  the  laws  of  the  State  of  Illinois ;  and  that  said 
order  also  contains  the  finding  that  the  respective 
successions  of  all  the  beneficiaries  to  all  property 
passing  by  will,  codicils,  gifts  and  transfers,  are  not 
subject  to,  or  liable  for,  any  inheritance  tax  under 
the  Law  of  this  State. 

Your  petitioner  also  prays  that  your  Honor  will  ap- 
point a  guardian  ad  litem  in  this  proceeding  to  act  for 
and  represent  Margaret  Doe,  the  minor  child  of  said  de- 
cedent, as  a  party  defendant,  and  that  said  guardian  ad 
litem  s.o  appointed  make  answer  to  this  petition,  but  not 
under  oath,  etc. 

Your  petitioner  makes ,  as  County 

Treasurer  of  Cook  County, ,  Inherit- 
ance Tax  Attorney  for  Cook  County,  parties  defendant  to 
this  proceeding  and  shows  that  he  has  served  said  County 
Treasurer  and  said  Inheritance  Tax  Attorney  with  cop- 
ies of  this  petition  and  asks  that  they  and  each  of  them 
shall  make  answer  hereunto,  but  not  under  oath,  and  in 
default  thereof  that  the  order  above  prayed  may  be  en- 
tered instanter. 

May  it  please  the  Court  to  grant  the  writ  of  summons 
directed  to  the  Sheriff  of  said  Cook  County  commanding 
him  that  he  summon  the  defendants.  Inheritance  Tax  At- 


360 

torney,  (by  name),  County  Treasurer  of  Cook  County, 
Illinois,  (byname),  and  (other  defendants)  to  appear  be- 
fore this  Court  on  the  first  day  of  the Term 

thereof  to  be  held  at  the  Court  House  at  Chicago,  in  the 
County  of  Cook  aforesaid,  then  and  there  to  answer  this 
petition. 


., 

As  Executors, 

George  Doe,  being  first  duly  sworn,  on  oath  states  that 
he  resides  at  1415  Blank  street,  in  the  City  of  Chicago, 
Illinois.;  that  he  has  subscribed  the  foregoing  petition  and 
that  the  allegations  therein  contained  are  true. 

(Signature)     Geoegb  Doe. 

Subscribed  and  sworn  to  this day  of 

,  A.  D.  1911. 


Notary  Public. 

Charles  Brown,  being  first  duly  sworn,  on  oath  states 
that  he  resides  at  1234  Blank  street,  in  the  City  of  Chi- 
cago, Illinois ;  that  he  has  subscribed  the  foregoing  peti- 
tion and  that  the  allegations  therein  contained  are  true. 

(Signature)     Charles  Brown. 

Subscribed  and  sworn  to  this ,  day  of 

,  A.  D.  1911. 


Notary  Public, 

537.     Petition  for  No  Tax— Nonresident  Decedent. 

If  an  affidavit  has  been  filed  with  the  Attorney  General 
or  Inheritance  Tax  Attorney  fully  covering  the  informa- 
tion required  in  the  printed  list  of  non-resident  questions, 
and  there  appears  no  tax  due,  yet  it  is  desired  because  of 
the  ownership  of  real  estate,  or  of  the  nature  or  charac- 
ter of  the  personal  property,  to  have  a  No  Tax  order  en- 


361 

tered,  it  i&  not  necessary  to  follow  the  form  of  the  peti- 
tion hereinbefore  set  forth,  because  the  aforesaid  affidavit 
will  contain  the  necessary  facts  on  which  to  base  an 
order  of  No  Tax.  The  non-resident  questions  are  in- 
tended to  cover  the  field  of  appraisable  property  under 
the  law  of  this  State. 

Therefore  a  short  petition  by  counsel  for  the  moving 
party,  reiterating  the  date  of  death,  residence  of  deced- 
ent, distribution  for  taxation,  and  prayer  for  summons, 
etc.,  with  an  examined  copy  of  the  affidavit  and  exhibits 
attached,  is  sufficient. 

538.  Petition  for  No  Tax— Relation  of  Parent  to 

Beneficiary. 

If  a  claim  is.  made  for  the  $20,000.00  exemption  under 
Section  1,  on  the  ground  that  the  decedent  stood  in  the 
acknowledged  relation  of  a  parent,  or  that  some  other 
exemption,  deduction  or  claim  renders  the  property  trans- 
ferred not  taxable,  the  facts  necessary  to  establish  this 
relationship  or  other  claim  must  be  alleged  and  proven. 
The  burden  of  proof  is  upon  the  person  or  corporation 
claiming  the  property  free  from  tax. 

539.  Order  of  No  Tax. 

The  order  of  No  Tax,  under  Section  23,  is  usually  in 
the  following  form: 

State  of  Illinois,    ) 
County  of  Cook.      )  ^^* 

In  the  County  Court  of  Cook  County. 

In  the  Matter  of  the  Estate  of  )  No 

John  Doe,  deceased.  j  Obder  of  ^  ^  No  Tax.  ' ' 

This,  cause  coming  on  to  be  heard  on  the  petition  of 
George  Doe  and  Charles  Brown,  as  executors  of  the  last 
will  and  codicils  of  John  Doe,  deceased,  praying  for  an 


362 

** Order  of  No  Tax,'*  finding  all  the  property  appraisable 
by  the  death  of  said  decedent  not  subject  to  lien  or  liens, 
nor  liable  for  inheritance  taxes  under  the  Inheritance  Tax 
Laws  in  force  in  this  state ;  and  finding  the  successions, 
rights  and  interests  of  the  beneficiaries.,  donees  and  trans- 
ferees not  taxable  thereunder. 

And  it  appearing  that ,  County 

Treasurer,  was  duly  served  with  summons  (or  by  appear- 
ance, as  the  case  may  be),  and  that  due  notice  of  the 
hearing  of  this  cause  was  regularly  served  upon  said 
County  Treasurer;  and  it  further  appearing  that  said 
County  Treasurer  is  in  Court. 

And  it  further  appearing  that , ,  In- 
heritance Tax  Attorney,  was  duly  served  with  summons 
(or  is  in  Court  by  appearance  as  the  case  may  be),  who 
was  present  in  person  at  all  hearings  hereof  and  at  the 
presentation  of  this  order  or  decree,  and  that  all  parties 
to  this  proceeding  are  in  Court; 

And  it  further  appearing  that  the  Court  has  plenary 
jurisdiction  in  the  premises,  the  Court  finds: 

That  decedent,  John  Doe,  died  testate,  domiciled  in  the 
City  of  Chicago,  County  of  Cook  and  State  of  Illinois, 
and  that  his  will  and  codicils  were  admitted  to  probate  in 
said  County,  without  objection — that  said  petitioners, 
George  Doe  and  Charles  Brown,  qualified  as  executors 
and  are  still  acting  as  such. 

That  on  due  inquiry  the  total  net  property  appraisable 
by  reason  of  the  death  of  decedent  is :  Personal,  $4,000.00 ; 
real,  $71,000.00;  total,  $75,000.00. 

That  the  distribution  of  said  property  under  the  will 
and  codicils  of  decedent  for  the  purpose  of  appraisement 
and  to  disclose  the  taxability  of  the  successions  thereto, 
together  with  the  statutory  exemptions  claimed,  as  al- 


363 

leged  in  said  executors'  petition,  is  hereby  approved  and 
confirmed. 

That  said  decedent  did  not,  prior  to  death,  make  any 
gift  or  gifts  in  contemplation  of  death  that  are  taxable 
under  the  Inheritance  Tax  Law  in  force  in  this  State. 

That  said  decedent  did  not,  prior  to  death,  make  any 
transfer  or  transfers  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  such  death,  that  are  taxable  un- 
der the  Inheritance  Tax  Law  of  this  State. 

It  is  therefoee  ordeked,  adjudged  and  decreed  that 
there  is  no  Inheritance  Tax  due  upon  the  succession  or 
successions  of  any  or  either  of  the  beneficiaries  under  the 
will  and  codicils  to  the  property  described  in  the  copy  of 
the  inventory  made  a  part  of  the  petition  of  executors, 
and  that  the  real,  personal  and  mixed  property  described 
therein  is  free  and  clear  of  any  and  all  liens  on  account 
of  Inheritance  Taxes. 

It  is  further  ordered,  adjudged  and  decreed  that  de- 
cedent made  no  gift  or  gifts  in  contemplation  of  death, 
and  that  decedent  made  no  transfer  or  transfers  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death  that  are  taxable  under  the  Inheritance  Tax  Law 
of  this  State. 


Judge  of  the  Co%mty  Court  of  Cook  Cownty, 
Entered  this day  of .,  A.  D 

Suggestion  to  Lawyers. 

All  orders  of  *Uax''  or  *^No  Tax'*  being  spread  of 
record  in  the  office  of  the  Clerk  of  the  County  Court,  it 
is  considered  good  practice  to  set  forth  in  orders  of 
No  Tax  (or  tax),  by  legal  description,  the  real  estate 
involved.     This  makes  a  permanent  record  of  the  real 


364 

estate  whicli  it  is  desired  to  relieve  of  the  question  of 
lien. 

If  it  is  ultimately  desired  to  obtain  under  Section  9, 
Inheritance  Tax  Laws  1909,  the  consent  of  state  officials 
for  the  transfer  of  specific  personal  property,  or  evi- 
dences thereof,  such  as  shares  of  stock  or  bonds,  it  may 
be  well  to  describe  the  same  by  certificate  or  serial  num- 
bers. 

540.     Entry  of  No  Tax  Order. 

The  Law  provides  that  the  County  Treasurer  shall  be 
made  a  party  defendant.  The  rules  of  the  County  Court 
of  Cook  County  require  that  the  Inheritance  Tax  Attor- 
ney and  County  Treasurer  shall  be  served  with  notice  of 
the  hearing  on  the  petition,  and  if  the  order  is  entered 
without  a  hearing  that  the  order  shall  be  0'  K.'d  by  the 
Inheritance  Tax  Attorney  and  notice  of  the  time  of  pres- 
entation given  the  County  Treasurer. 

There  are  two  methods  of  disposing  of  Petitions  for 
No  Tax. 

First,  by  hearing  before  the  Court,  at  which  witnesses 
must  be  produced  to  establish  all  the  allegations  of  the 
petition. 

Second,  by  submitting  the  petition  and  draft  order,  to- 
gether with  copies  thereof,  to  the  Inheritance  Tax  Attor- 
ney, who  makes  an  investigation  of  the  facts,  values,  de- 
ductions and  other  material  matters.,  and  if  satisfied  there 
is  no  tax  due  by  reason  of  decedent's  death,  usually 
0.  K.'s  the  order. 

The  petition  and  0.  K.*d  order  are  thereupon  pre- 
sented to  the  County  Court  on  motion  of  course,  notice 
being  given  to  the  County  Treasurer  of  the  time  of  pres- 


365 

entation,  and  if  the  Court  considers  the  order  proper 
and  correct,  enters  the  same  without  a  hearing. 

The  order  should  either  be  0.  K.'d  by  the  County 
Treasurer  or  notice  of  the  time  and  place  of  presentation 
of  said  order  should  be  served  him  as  well  as.  on  all  de- 
fendants, so  that  any  objection  to  the  entry  of  such  order 
may  be  heard. 


366 


CHAPTER  XXIX. 
Attorney  General  Opinions. 


543.  State's    Attorney  —  Fees    in 

General  —  Deposit   to    stop 
Interest. 

544.  Interest — Euns    until    Tax    is 

Paid. 

545.  Deductions  —  When    Expense 

for  Monument  cannot  be  De- 
ducted. 

546.  Appraiser    Cannot    Employ 

Lawyer     and     Charge     his 
Services  Against  State. 

547.  Tax — When     Postponed      and 
When  Immediately  Collectible. 

548.  Public    Administrator    has    no 

General  Duty  to  Enforce  In- 
heritance Tax  Law. 


549.  A  Will  is  not  an  Asset  Within 

the  Meaning  of  Section  Nine 
of  the  Inheritance  Tax  Act, 
and  may  be  Kemoved  for  the 
Purposes  of  Probate  With- 
out the  Consent  of  the  At- 
torney General  and  State 
Treasurer. 

550.  Widow's  Award  is  Taxable. 

551.  Eefund    of    Tax    Erroneously 

Paid. 

553.  Partnership  Assets  in  Foreign 
State  When  Owned  by  De- 
ceased Resident  of  Illinois. 


543.     State's  Attorney — Fees  in  General — ^Deposit 
to  Stop  Interest. 

In  reply  to  your  letter  of  March  6tli,  receipt  of  which 
has  been  heretofore  acknowledged,  in  which  you  request 
me  to  render  you  an  opinion  as  to  your  duties  as  State's 
Attorney  in  the  matter  of  the  collection  of  inheritance 
taxes  in  your  county  and  your  compensation  for  services 
performed  in  relation  thereto,  will  say  that  your  ques- 
tions hereinafter  set  out  will  be  answered  together,  thus 
avoiding  useless  repetition. 

1.  *^If  a  State's  Attorney  commences  a  proceed- 
ing for  the  assessment  of  an  inheritance  tax  by  filing 
a  petition  in  the  County  Court  and  within  six  (6) 
months  after  the  death  of  decedent,  and  in  cases 
where  no  steps  have  been  taken  by  the  Executor  or 
administrator  of  the  estate  for  the  assessment  of 
the  said  tax,  and  the  State's  Attorney  appears  for 
The  People  and  the  Court  finds  an  Inheritance  Tax 
due  against  said  estate,  under  such  circumstances 
is  the  State's  Attorney  entitled  to  a  reasonable  at- 
torney fee  to  be  fixed  by  the  Court  in  such  case  ? 


367 

2.  **Is  it  the  duty  of  the  State's  Attorney  to  ap- 
pear for  The  People  in  all  ca&es  of  Inheritance  Tax 
matters  ? 

3.  **Can  a  State's  Attorney  file  a  petition  in 
Comity  Court  immediately  after  the  death  of  de- 
cedent for  the  purpose  of  the  assessment  of  an  in- 
heritance tax  on  an  estate  subject  to  tax,  or  must  he 
wait  six  (6)  months  to  allow  the  executor  or  admin- 
istrator to  have  the  same  done  voluntarily?" 

There  are  two  statutory  provisions  which  fix  the  duty 
of  State's  Attorneys  in  inheritance  tax  matters.  Para- 
graph 2  of  Section  5  of  Chapter  14,  Hurd's  Revised  Stat- 
utes, 1909,  provides,  among  other  things,  that  it  shall  be 
the  duty  of  the  State 's  Attorney  in  each  county  *  *  to  pros- 
ecute actions  and  proceedings  for  the  recovery  *  *  * 
Revenues  *  *  *  accruing  to  the  State, ' '  and  Section 
16  of  the  Inheritance  Tax  Act  provides : 

**When  it  appears  that  any  tax  is  due  and  unpaid 
under  this  Act  and  the  persons,  institutions  or  cor- 
porations liable  for  said  tax  have  refused  or  neg- 
lected to  pay  the  same,  it  shall  be  the  duty  of  the 
State's  Attorney  in  counties  of  the  first  and  second 
class  *  *  *  if  he  have  proper  cause  to  believe  a 
tax  is  due  and  unpaid,  to  prosecute  the  collection  of 
the  same  in  the  County  Court  of  the  proper  county 
in  the  manner  provided  in  Section  15  of  the  Act  for 
the  enforcement  and  collection  of  such  tax. ' ' 

The  quotation  from  Chapter  14,  in  my  opinion,  requires 
and  I  consider  it  the  duty  of  the  State's  Attorney  to 
appear  for  and  represent  the  State  in  all  proceedings 
pertaining  to  the  ascertainment  of  the  amount  due  and 
the  collection  of  inheritance  taxes.  That  such  proceed- 
ings involve  the  revenue  and  that  the  State  is  vitally 
interested  therein  is  too  plain  a  proposition  to  require 
citation  of  authority. 

The  portion  of  Section  16  of  the  Inheritance  Tax  Act 


368 

quoted  makes  it  the  duty  of  the  State's  Attorney  to  pros- 
ecute the  collection  of  the  tax,  when  the  amount  thereof 
has  been  ascertained  and  assessed  in  the  manner  pro- 
vided by  statute,  but  the  tax  has  not  been  paid.  As  I 
construe  this  section,  there  is  but  one  contingency  when 
the  State's  Attorney  is  required  or  authorized  to  act 
thereunder,  and  that  igi,  where  the  proceedings  to  assess 
the  tax  have  culminated  in  an  order  fixing  the  amount 
thereof  and  payment  has  been  refused  or  neglected  to 
be  made  by  the  person  or  corporation  whose  duty  it  is  to 
pay  the  tax;  it  then  becomes  the  duty  of  the  State's  At- 
torney to  enforce  the  collection  of  the  amount  due  by  the 
method  outlined  in  Section  15. 

The  County  Judge,  by  Section  11,  is  given  full  power 
to  appoint  an  Appraiser  upon  his  own  motion  or  of  any 
party  in  interest.  Under  this  section,  the  State's  Attor- 
ney is  authorized  to  present  a  petition  on  behalf  of  the 
State,  asking  for  the  appointment  of  an  Appraiser,  and 
it  is  his  duty  to  do  so  if  it  appear^  that  the  administra- 
tor, executor  or  person  whose  duty  it  is  primarily  to  do 
so  does  not  intend  to  comply  with  the  law.  Upon  ap- 
pointment, it  becomes  the  duty  of  the  Appraiser  to  ascer- 
tain and  report  to  the  County  Judge  the  fair  market 
value  of  the  property  of  the  decedent,  from  which  the 
County  Judge  fixes  the  amount  of  the  tax,  if  no  appeal 
is  taken ;  and  the  amount  so  fixed,  or,  if  appeal  is  taken, 
eventually  assessed,  becomes  due  and  payable.  Under 
the  several  provisions  of  the  statute  designed  to  prevent 
the  distribution  of  the  estate  or  the  removal  of  it  from 
the  jurisdiction  of  the  assessing  officers,  liens  are  cre- 
ated, and  the  executors,  administrators,  trustees.,  and 
even  banking  houses  and  like  institutions  are  required, 
in  dealing  with  the  property  of  the  decedent,  to  protect 
the  State  against  the  loss  of  the  tax,  or,  in  the  event  they 


369 

do  not,  are  made  personally  liable  for  the  tax.  There- 
fore, under  the  provision  of  Section  5,  for  instance,  after 
the  tax  has  been  assessed,  it  may  appear  that  the  admin- 
istrator, executor  or  trustee  has,  distributed  the  estate 
and  has  not  retained  the  amount  due  the  State  as  in- 
heritance tax;  in  such  case,  Sections  15  and  16  provide 
the  method  of  procedure  for  the  collection  of  the  tax 
from  such  executor  administrator  or  trustee. 

I  am  unable  to  see  any  reason  for  holding  that  Section 
11  does  not  cover  every  case  where  the  necessity  api)ears 
for  the  appointment  of  an  appraiser,  either  by  voluntary 
or  involuntary  proceeding,  and  it  seems  that  the  proced- 
ure provided  for  by  Sections  15  and  16  ia  not  adapted  to 
the  ascertainment  of  the  amount  of  the  tax  due  and  no 
reason  appears  for  providing  a  different  method  of  ap- 
pointing an  appraiser  under  one  state  of  facts  than  the 
other.  I,  therefore,  am  of  the  opinion  that  the  method  of 
appointing  appraisers  as  outlined  in  Section  11  applies 
to  all  cases  and  that  Sections  15  and  16  provide  the 
method  of  collecting  the  tax  where  payment  is  refused 
or  neglected  after  it  has  been  ascertained  by  the  method 
and  machinery  provided  by  the  act  for  so  doing. 

State's  Attorneys  have  never  been  allowed  compensa- 
tion for  appearing  for  and  representing  The  People  in 
matters  involving  the  revenue,  or,  rather,  it  may  be  said 
that  the  compensation  they  receive  from  the  State  is  in- 
tended to  include  their  services  in  such  matters.  No 
reason  appears  as  to  why  the  rule  should  be  different  in 
proceedings  relative  to  the  revenue  raised  by  the  inher- 
itance tax  than  in  other  matters  involving  the  revenue 
unless  an  exception  is  made  by  the  statute  under  consid- 
eration. The  only  thing  relative  to  the  fees  of  the  State 's 
Attorney  is  in  Section  16  and  is — 

**in  every  such  case  said  court  shall  allow  as  costs 


370 

in  said  case  sucli  fees  to  said  attorney  as  the  court 
may  deem  reasonable/' 

It  is.,  therefore,  my  opinion,  that  in  cases  brought  to 
recover  the  amount  of  the  tax,  dne  and  unpaid,  after  the 
same  has  been  ascertained  and  fixed,  the  court  may  fix 
and  allow  a  reasonable  attorney  fee  to  be  taxed  as  costs 
against  the  defendant,  and  that  in  all  other  procedure  for 
the  assessment  and  collection  of  the  tax,  there  being  no 
fee  provided  therefor  by  statute  and  the  revenue  being 
exempted  by  express  enactment  from  those  matters  upon 
which  State's  Attorneys  are  entitled  to  commission,  thes.e 
services  must  be  considered  to  be  among  those  for  which 
the  amount  paid  them  from  the  State  Treasury  is  deemed 
to  compensate.  Attorney  General  Illinois  Report  for 
1910,  436.) 

I  have  no  question  of  the  right  of  the  State's  Attor- 
ney, as  the  representative  of  the  State,  to  file  a  petition 
for  the  appointment  of  an  appraiser ;  in  fact,  I  consider  it 
his  duty  to  do  s.o  in  proper  case.  It  has  been  held  to  be 
primarily  the  duty  of  the  administrator  or  executor,  or 
the  person  charged  with  the  payment  of  the  tax,  to  do 
this,  and  that  the  power  given  the  County  Judge  or 
State 's  Attorney  to  act  in  the  premises  was  not  intended 
to  relieve  the  personal  representative  of  this  obligation. 
Frazer  v.  People,  3  N.  Y.  Supp.  134. 

There  are  two  questions,  then,  involved :  First,  when, 
under  Section  11,  the  representative  of  the  State  can  ap- 
ply for  the  appointment  of  an  appraiser  to  fi^  the  value 
of  the  property,  with  a  view  to  having  fixed  and  assessed 
the  amount  of  the  tax.  Second,  when  can  the  State's  At- 
torney proceed  under  Sections  15  and  16  to  the  collec- 
tion of  the  tax  so  ascertained  and  assessed? 

The  matter  of  the  appraisement  is  a  mere  incident  to 


371 

the  collection  or  payment  of  the  tax.  It  is  the  method 
provided  by  statute  for  ascertaining  the  amount  due. 
Under  Section  11,  in  my  opinion,  any  party  interest,  in- 
cluding the  State,  at  any  time,  may  apply  for  the  appoint- 
ment of  an  appraiser,  with  a  view  to  ascertaining  the  ex- 
tent and  value  of  the  estate  and  having  the  tax  assessed. 

It  is  to  the  second  proposition,  involving  action  under 
Sections  15  and  16,  that  I  shall  devote  the  most  of  my 
consideration ;  that  is,  'whether  prior  to  the  six  months ' 
period  fixed  for  discount  and  rebate,  any  presumption  of 
refusal  or  neglect  to  pay  the  tax  arises  so  that  the  par- 
ties may  be  subjected  to  the  payment  of  costs  under  the 
provisions  of  Section  16. 

Section  3  is  as  follows : 

**A11  taxes  imposed  by  this  act,  unless  otherwise 
herein  provided  for,  shall  be  due  and  payable  at  the 
death  of  the  decedent,  and  interest  at  the  rate  of  six 
per  cent,  per  annum  shall  be  charged  and  collected 
thereon  for  such  time  as  said  taxes  are  not  paid: 
Provided,  that  if  said  tax  is.  paid  within  six  months 
from  the  accruing  thereof,  interest  shall  not  be 
charged  or  collected  thereon,  but  a  discount  of  five 
per  cent,  shall  be  allowed  and  deducted  from  said 
tax.'' 

This  provision  makes  the  tax  due  and  payable  at  the 
death  of  the  decedent,  and  if  it  was  not  qualified  by  the 
further  provision  relative  to  the  rebating  or  interest  and 
allowance  of  discount  if  paid  within  six  months,  there 
would  be  no  difficulty  in  construing  it. 

In  my  opinion,  the  purpose  of  rebating  the  interest 
and  allowing  the  discount  is  to  encourage  the  early  and 
voluntary  payment  of  the  tax.  There  can  be  no  other 
possible  reason  for  the  allowance  of  this  discount.  If 
this  be  the  intention  of  the  Legislature,  it  seems  to  me 
the  further  intention  is  clearly  implied,  that,  until  the 


372 

period  fixed  by  it  for  voluntary  payments  at  discount  lias 
elapsed,  no  proceeding  for  the  collection  of  the  tax  (as 
distinguished  from  its  assessment)  can  be  instituted.  To 
hold  otherwise,  and  that  the  State's  Attorney  could  im- 
mediately after  the  death  of  the  decedent  proceed  to  en- 
force the  collection  of  the  tax,  would  be  to  do  away  with 
the  reason  of  the  Legislature  for  allowing  the  discount. 
This  has  been  the  construction  of  the  New  York  Courts 
of  a  similar  statute,  which,  because  of  the  fact  that  our 
statute  follows  their  statute,  is  entitled  to  considerable 
weight  upon  questions  of  construction. 

The  Court,  in  the  ease  of  Frazer  v.  People,  3  N.  Y. 
Supp.  134;  6  Dem.  174,  said: 

^^I  think  that  Section  4  of  the  Act  of  1887,  read 
with  its  other  provisions,  indicates  the  intention  to 
be  that  while  tax  is.  due  and  payable  from  the  death 
of  the  decedent  for  some  purposes — among  others, 
that  proceedings  may  be  had  to  appraise  and  ascer- 
tain the  value  of  the  estate  subject  to  the  tax,  and 
the  amount  of  the  tax,  and  that  interest  may  be 
charged  from  the  death  of  the  decedent  in  case  the 
tax  is  not  paid  within  eighteen  months  thereafter — 
yet  as  the  section  referred  to  provides  that  if  the 
tax  is  paid  within  eighteen  months  no  interest  shall 
be  charged  and  collected  thereon,  it  would  s.eem  that 
no  proceeding  can  be  instituted  to  enforce  the  pay- 
ment of  the  tax  within  eighteen  months.  See  the 
Matter  of  the  Estate  of  Mrs,  Astor  (20  Abb.  N.  C. 
405-415).  It  was  intended,  I  believe,  to  enable  the 
representative  of  the  decedent,  under  many  conting- 
encies that  may  arise  in  the  settlement  of  the  estate, 
to  ascertain  the  amount  of  the  tax  and  for  that  pur- 
pose time  may  be  necessary,  to  determine  the  in- 
debtedness of  the  decedent  and  the  like. 

It  is  claimed  by  the  district  attorney  that  the  cita- 
tion in  this  matter  is.  to  show  cause  ^why  the  tax 
should  not  be  ascertained'  as  well  as  why  it  should 
not  be  paid.  That  is  so,  but  I  do  not  think  costs  may 
be  awarded  except  *  after  the  refusal  or  neglect  of 


373 

the  persons  interested  in  the  property  liable  to  said 
tax  to  pay  the  same.'  " 

Mr.  Dos  Passes,  in  di&cussing  this  proposition,  says: 
^*The  executor,  administrator,  or  any  other  party 
interested  in  the  estate  liable  to  the  tax,  may  also 
Tinder  this  act  institute  proceedings  to  have  the  prop- 
erty assessed  or  valued  for  the  purpose  of  ascertain- 
ing the  amount  of  tax  due.  *  *  *  But  it  will  be 
observed  that  this  proceeding  is  of  an  entirely  differ- 
ent nature  from  the  one  directed  to  be  begun  by  the 
dis.trict  attorney,  which  is,  primarily,  to  compel  pay- 
ment of  the  tax  from  the  parties  who  have  re- 
fused or  neglected  to  pay  the  same.*' 

Dos  Passes,  Inheritance  Tax  Laws  (2d  ed.),  Sec. 
66,  p.  397. 

It  is,  therefore,  in  my  opinion,  the  duty  of  the  State's 
Attorney,  generally,  as  circumstances  may  require,  in  the 
matter  of  appraisement  and  ascertainment  of  the  tax,  to 
represent  the  State,  and  in  these  matters  he  may  pro- 
ceed at  any  time  after  the  death  of  the  decedent,  and  for 
these  services  he  can  be  allowed  no  compensation  other 
than  that  paid  him  annually  from  the  State  Treasury. 

If,  after  the  expiration  of  six  months,  the  State's  At- 
torney shall  have  proper  cause  to  believe"  that  a  tax  is 
due  and  unpaid,  and  the  same  has  been  assessed,  then 
he  may  proceed  under  Section  16,  and  the  Court  may  fix 
a  reasonable  attorney  fee  to  be  taxed  as  costs  against 
the  defendant. 

I  am  aware  that  an  opinion  to  the  State's  Attorney 
of  Madison  County,  as  published  at  page  611  of  the  Re- 
port of  the  Attorney  G-eneral,  1910,  states  a  rule  which 
is  in  conflict  with  this  opinion. 

I  have,  since  our  interview  in  this  matter  and  the  re- 
ceipt of  your  letter,  given  these  questions  careful  consid- 
eration and  have  reached  the  conclusion  that  the  con- 


374 

stmction  of  the  statute  arrived  at  in  this  opinion  is  the 
correct  one,  and  the  one  that  should  be  adopted  by  this 
department,  and  that  the  law  as  herein  stated  is.  in  har- 
mony with  the  decisions  of  the  courts  and  the  intention 
of  the  Legislature,  and  have  extended  this  opinion  some- 
what in  order  that  my  reasons  for  reaching  such  conclu- 
sion may  clearly  appear. 

Opinion  to  State's  Attorney,  April  17th,  1911. 

544.     Interest— Runs  Until  Tax  Is  Paid. 

The  Inheritance  Tax  Act  provides  for  the  payment  of 
interest  on  inheritance  taxes  and  the  right  to  collect  such 
interest  cannot  be  effected  by  the  failure  of  the  County 
Judge  or  other  officers  to  file  a  statement  showing  that 
the  estate  is  taxable. 

It  is  claimed  that  no  interest  is  due  upon  the  amount 
of  the  inheritance  tax  because  neither  the  County  Judge 
nor  the  Clerk  filed  a  statement  in  writing  with  the  County 
Treasurer  showing  this  estate  to  be  probably  taxable. 

This  contention  is,  in  my  opinion,  without  merit.  The 
liability  to  interest  on  the  amount  of  the  tax  is  not  de- 
pendent upon  the  act  of  the  County  Judge  or  Clerk  in 
reporting  estates  probably  subject  to  the  tax.  On  the  con- 
trary, the  statute  specifically  provides  that  the  tax  shall 
be  due  and  payable  at  the  death  of  the  decedent,  with  in- 
terest at  six  per  cent.,  for  the  time  the  same  remains  un- 
paid, if  not  paid  within  six  months.  When  the  liability 
to  pay  interest  has  been  incurred  it  is  chargeable 
from  the  time  the  tax  accrued.  Matter  of  Davis,  149  N.  Y. 
539. 

It  seems  to  me  that  this  contention  is  a  plea  of  ignor- 
ance of  the  law.  The  Inheritance  Tax  Act  places  upon 
the  legal  representatives  of  a  decedent  the  duty  of  pay- 
ing the  tax  in  the  first  instance  and  makes  them  person- 


375 

ally  liable  therefor.  They  are  in  a  position  to  know  be- 
fore any  other  person  whether  an  inheritance  tax  is  due. 
To  say  that  they  did  not  know  any  tax  was  due,  because 
the  Judge  and  Clerk  failed  to  report  the  probability  of  it 
to  the  Treasurer  is  nothing  more  than  to  say  that  they 
were  ignorant  of  the  law,  which  is  no  excuse  to  relieve 
them  from  the  payment  of  interest.  Matter  of  Piatt,  29 
N.  Y.  S.  396.  In  my  opinion,  interest  should  be  collected 
on  the  tax  in  this  case  if  that  is  the  only  contention 
against  it. 

Opinion  to  Special  Assistant,  August  27th,  1909. 

545.     Deductions — 'When   Expense   for   Monument 
Cannot  Be  Deducted. 

An  Inheritance  Tax  Appraiser  should  determine  the 
fair  market  value  of  the  estate  at  the  time  of  decedent's 
death,  and  for  that  purpose  should  consider  claims  against 
the  estate  which  were  contracted  for  by  decedent ;  moneys 
expended  for  monument. 

You  state  that  there  are  a  number  of  claims  against 
the  estate  which  the  administrator  has  paid,  but  which 
were  never  filed  or  passed  on  by  the  County  Court.  You 
submit  the  question  whether  it  is  proper  to  allow  these 
payments  in  making  your  appraisement  for  inheritance 
tax  purposes,  and  also  whether  it  is  proper  to  allow  a 
claim  for  a  monument. 

In  reply  will  say  that  it  is  the  duty  of  the  appraiser  to 
fix  the  fair  market  value  of  the  estate,  as  of  the  time  of 
the  decedent's  death. 

Dos  Passes,  in  his  work  on  Inheritance  Tax,  deduces 
the  principle  that  where  such  is  the  duty  of  the  appraiser, 
it  is  within  his  powers  and  duty  to  consider  evidence  re- 
lating to  the  debts  of  the  decedent,  which  are  or  may  be- 
come liens  upon  his  estate.    Such  debts,  however,  are  lim- 


376 

ited  to  those  which  had  their  inception  during  the  lifetime 
of  the  decedent.  It  is,  therefore,  my  opinion  that  you,  as 
appraiser,  for  inheritance  tax  purposes,  should  hear  the 
evidence  with  reference  to  claims  against  the  estate,  and 
from  all  the  evidence  with  reference  thereto,  determine 
the  fair  market  value  of  it.  However,  I  do  not  think  that 
claim  for  a  monument  should  be  allowed  or  considered  by 
you  to  affect  the  value  of  the  estate,  unless  a  contract 
with  reference  thereto  was  made  by  the  decedent  during 
his  lifetime.  The  reason  for  this  is  that  if  the  heirs  or  ad- 
ministrator, after  the  decedent's  death,  contracted  for 
this  monument,  claim  for  the  same  was  not  a  debt  due  or 
to  become  due  from  the  estate  and  contracted  for  by  the 
decedent. 

Opinion  to  State 's  Attorney,  January  15th,  1909. 

546.     Appraiser     Cannot     Employ     "LsLwyer     and 
Charge  His  Services  Against  State. 

An  appraiser  appointed  under  the  Inheritance  Tax 
Law  is  not  entitled  to  compensation  for  fees  paid  to 
special  counsel. 

You  have  called  my  attention  to  the  provisions  of  the 
Inheritance  Tax  Act,  with  reference  to  the  requirement 
that  County  Treasurers  make  semi-annual  reports.  If, 
upon  such  reports,  it  appears  that  appraisers  in  inherit- 
ance tax  proceedings  have  employed  special  attorneys  for 
their  instruction  and  advice  as  to  such  proceeding,  and 
that  such  attorneys  have  been  paid  for  services  rendered; 
out  of  the  funds  collected  as  inheritance  taxes  in  particu- 
lar estates  involved,  you  submit  the  question  whether  the 
Auditor  of  Public  Accounts  or  the  State  Treasurer  is  in- 
vested with  authority  to  object  to  the  payments  so  made 
and  to  refuse  to  allow  credit  for  the  same  to  Treasurers 
so  reporting.    You  also  ask  to  be  advised  as  to  whom 


377 

STicli  a  matter  should  be  referred  for  necessary  action  in 
the  premises. 

In  reply  will  say  that  upon  the  receipt  of  your  com- 
munication, I  instituted  an  investigation,  with  the  result 
of  finding  that  in  a  number  of  instances  appraisers  in 
inheritance  tax  proceedings  have  reported  among  their 
expense  items  fees  paid  to  attorneys  employed  by  them 
in  such  proceedings.  Such  reports  being  approved  by 
the  County  Judge,  who  thereupon  entered  his  orders  and 
issued  his  certificates  to  put  into  effect  such  approval, 
has  resulted  in  the  payment,  to  the  attorneys  so  em- 
ployed by  the  inheritance  tax  appraiser,  of  moneys  col- 
lected for  inheritance  taxes. 

I  am  of  the  opinion  that  payments  to  attorneys  em- 
ployed by  inheritance  tax  appraisers,  when  sought  to  be 
charged  against  inheritance  tax  funds,  is  unwarranted 
and  cannot  be  justified.  The  duties  of  the  inheritance  tax 
appraiser  and  his  compensation  are  defined  in  Section  11 
of  the  Inheritance  Tax  Act,  which  provides  that  apprais- 
ers shall  be  appointed, 

^^  whose  duty  it  shall  be  forthwith  to  give  such  notice 
by  mail,  to  all  persons  known  to  have  or  claim  an  in- 
terest in  such  property,  and  to  such  persons  as  the 
County  Judge  may  by  order  direct,  of  the  time  and 
place  he  will  appraise  such  property,  and  at  such  time 
and  place  to  appraise  the  same  at  a  fair  market 
value,  and  for  that  purpose  the  appraiser  is  author- 
ized by  leave  of  the  County  Judge,  to  use  subpoena* 
for  and  to  compel  the  attendance  of  witnesses  before 
him,  and  to  take  the  evidence  of  such  witnesses  under 
oath  concerning  such  property  and  the  value  thereof, 
and  he  shall  make  a  report  thereof  and  of  such  value 
in  writing,  to  said  County  Judge,  with  the  deposi- 
tions of  the  witnesses  examined  and  such  other  facts 
in  relation  thereto  and  to  said  matters  as  said  County 
Judge  may,  by  order,  require  to  be  filed  in  the  office 
of  the  clerk  of  said  County  Court,  and  from  this  re 


378 

port  the  said  County  Judge  shall  forthwith  assess 
and  fix  the  then  cash  value  of  all  estates,  annuities 
and  life  estates  or  terms  of  years  growing  out  of  said 
estate  and  the  tax  to  which  the  same  is  liable,  and 
shall  immediately  give  notice  by  mail  to  all  parties 
known  to  be  interested  therein.  Any  person  or  per- 
sons dissatisfied  with  the  appraisement  or  assess- 
ment may  appeal  therefrom  to  the  County  Court  of 
the  proper  county  within  sixty  days  after  the  mak- 
ing and  filing  of  such  appraisement  or  assessment  on 
paying  or  giving  security  satisfactory  to  the  County 
Judge  to  pay  all  costs,  together  with  whatever  taxes 
shall  be  fixed  by  said  Court.  The  said  appraiser 
shall  be  paid  by  the  County  Treasurer  out  of  any 
funds  he  may  have  in  his  hands  on  account  of  the 
inheritance  tax  collected  in  said  appraisement,  as  by 
law  provided,  on  the  certificate  of  the  County  Judge, 
such  compensation  as  such  Judge  may  deem  just  for 
said  appraiser's  services  as  such  appraiser,  not  to 
exceed  ten  dollars  per  day  for  each  day  actually  and 
necessarily  employed  in  said  appraisement,  together 
with  his  actual  and  necessary  traveling  expenses  and 
disbursements,  including  such  witness  fees  paid  by 
him.'' 

The  rule  is  that  the  compensation  of  an  officer  of  this 
kind,  if  he  shall  have  any,  must  be  provided  for  in  the 
statute,  and  that  only  such  compensation  as  the  statutes 
provide  for  him  is  he  entitled  to  receive.    I  am  aware  of 
no  rule  that  can  operate  to  extend  the  compensation  of 
the  inheritance  tax  appraiser,  or  the  matters  for  which 
he  is  entitled  to  charge  compensation,  to  other  items  than 
those  specifically  mentioned  in  the  statute,  which  are, 
**such  compensation  as  such  Judge  may  deem  just 
for  said  appraiser's  services  as  such  appraiser,  not 
to  exceed  ten  dollars  per  day  for  each  day  actually 
and  necessarily  employed  in  said  appraisement,  to- 
gether with  his  actual  and  necessary  traveling  ex- 
penses and  disbursements,  including  such  witness 
fees  paid  by  him." 


379 

These  are  the  only  items  payable  to  the  appraiser  and 
the  County  Judge  must  issue  his  certificate  in  regard  to 
such  payment  before  the  County  Treasurer  is  authorized 
to  deduct  the  amount  thereof  from  the  tax  collected. 

The  office  of  appraiser  in  inheritance  tax  proceedings, 
as  I  view  it  in  the  light  of  the  duties  to  be  performed, 
can  present  no  circumstances  in  which  the  appraiser 
should  be  under  the  necessity  of  seeking  his  own  private 
counsel  as  to  such  proceedings.  He  gives  notice  of  the 
time  and  place  where  he  will  attend  for  the  purpose  of 
appraising  the  property,  and  may  take  the  evidence  of 
witnesses.  Such  proceeding  is  in  the  nature  of  a  hear- 
ing in  the  matter  of  the  appraisement  and  for  that  pur- 
pose the  interested  parties  who  are  all  entitled  to  be  pres- 
ent may  have  counsel  to  represent  them  and  to  advise  the 
appraiser.  The  interests  of  the  public  will  be  represented 
by  the  State 's  Attorney  or  the  Attorney-General,  and  so 
the  appraiser  ought  to  expect  to  be  fully  advised  by  such 
counsel  of  the  parties  as  to  the  state  of  the  law  upon  any 
proposition  likely  to  arise  for  his  determination.  Even 
in  the  event  that  counsel  for  the  parties  did  not  attend 
before  the  appraiser,  I  conceive  that  the  appraiser  may 
call  upon  the  County  Judge  for  advice  in  the  premises. 

In  this  view  of  the  matter,  the  situation  is  not  unlike 
that  pertaining  to  the  Master  in  Chancery  as  to  whose 
fees  it  is  the  well  settled  law  in  a  long  line  of  cases  that 
he  cannot  receive  compensation  except  for  those  things 
specifically  mentioned  in  the  statute. 

I  therefore  come  to  the  conclusion  that  because  the 
statute  fails  to  provide  that  the  inheritance  tax  appraiser 
may  have  compensation  for  legal  counsel,  that  if  an  or- 
der shall  be  issued  by  a  County  Judge  for  the  payment  of 
the  fees  of  counsel  employed  by  an  appraiser  in  such 


380 

proceeding,  the  issuance  of  such  order  would  be,  and  is, 
an  error  and  is,  therefore,  unlawful. 

Opinion  to  State  Treasurer,  June  10th,  1910. 

547.     Tax — When  Postponed  and  "WTien  Immedi- 
ately Collectible. 

1.  Under  the  Inheritance  Tax  Act  in  force  prior  to 
July  1st,  1909,  contingent  estates  could  not  be  appraised 
for  inheritance  tax  purposes  until  the  contingency  hap- 
pened. 

2.  Under  the  Inheritance  Tax  Act  of  1909,  provision 
is  made  for  compromising  the  amount  of  the  inheritance 
tax  in  an  estate  in  which  the  decedent  died  prior  to  July 
1st,  1909. 

3.  In  a  case  in  which  the  decedent  died  subsequent  to 
July  1st,  1909,  no  postponement  of  the  tax  is  necessary  in 
case  of  contingent  estates  but  in  such  a  case  a  tax  is  im- 
mediately imposed  at  the  highest  rate  possible  upon  the 
happening  of  any  of  the  contingencies  depending  upon 
the  devise. 

Under  date  of  the  30th  instant  you  have  submitted  for 
my  consideration  the  case  of  a  decedent  who  died  testate, 
seized  of  real  estate  of  the  value  of  one  hundred  and 
twenty  thousand  dollars,  devising  the  same  to  a  son  in 
fee  simple  on  the  following  conditions : 

1.  Possession  of  the  real  estate  not  to  be  vested  in 
the  devisee  until  he  attains  the  age  of  twenty-one,  if  the 
father  lives  to  that  period,  but 

2.  If  the  father  dies  before  the  devisee  attains  the  age 
of  twenty-one  then  possession  of  the  real  estate  to  vest 
immediately  in  such  devisee. 

3.  If  that  devisee  die  before  attaining  the  age  of  twen- 
ty-one then  the  father  to  take  a  life  estate  in  the  real  es- 


381 

iate  with  remainder  in  fee  to  the  heirs  of  a  deceased 
brother. 

You  say  that  in  proceeding  to  collect  the  inheritance 
tax  upon  the  succession  to  this  estate  you  have  met  with 
difficulty  in  satisfactorily  jfixing  the  persons  to  be  taxed 
and  the  amounts  to  be  paid  and  ask  to  be  advised  as  to 
the  state  of  the  law  on  this  subject. 

In  reply  will  say  that  the  devise  to  the  son  of  the  tes- 
tator under  the  terms  of  the  will,  will  not  vest  until  he 
becomes  twenty-one  years  of  age,  or  earlier  if  his  father 
dies  before  that  time.  In  case  the  son  dies  before  attain- 
ing the  age  of  twenty-one  the  devise  shifts  to  a  life  estate 
in  the  father  (brother)  with  remainder  to  his  collateral 
heirs,  who  are  strangers  of  the  blood  to  the  testator. 
Therefore,  the  devise  is  contingent  and  ambulatory. 

It  cannot  be  determined  with  legal  certainty  at  what 
time  the  devise  will  operate  to  vest  either  of  the  estates 
created  in  the  will  with  reference  thereto,  because  the 
vesting  of  title  and  possession  under  it  is  postponed  until 
the  happening  of  one  of  the  contingencies  mentioned. 

It  is  for  this  reason  that  you  are  unable  to  determine 
the  persons  who  are  liable  to  pay  the  inheritance  tax  and 
the  amount  thereof. 

If  the  decedent  died  prior  to  July  1st,  1909,  as  to  which 
you  have  not  stated  the  time  of  his  decease,  it  will  be  one 
of  the  class  of  cases  which  fall  under  the  rule  of  People 
V.  McCormick,  208  HI.  437,  where  the  Court  holds  that  to 
authorize  the  imposition  of  an  inheritance  tax  there  must 
be  actual  ownership  and  the  possession  of  a  title  that  can 
be  conveyed. 

Under  the  authority  of  this  case,  prior  to  July  1st,  1909, 
such  a  contingent  estate  as  you  have  described  could  not 
be  taxed  until  the  contingency  vesting  the  estate  had  hap- 
pened.   If,  therefore,  the  case  which  you  put  falls  within 


382 

the  rule  of  the  McCormick  case,  the  estates  created  by  the 
devise  under  consideration  cannot  be  taxed  presently  but 
the  imposition  of  the  tax  must  be  postponed  until  the 
happening  of  one  of  the  contingencies  named  whereby 
title  will  become  actually  vested. 

If  the  tax  accrued  under  the  Act  of  1909,  then  Section 
25  provides  that  there  shall  be  no  postponement  but  that 
the  tax  shall  be  immediately  imposed  at  the  highest  rate 
possible  upon  the  happening  of  any  of  the  contingencies 
depending  upon  the  devise. 

In  view  of  the  legislative  intention  that  the  provision 
of  the  law  should  obviate  the  postponement  of  inherit- 
ance tax  proceedings  in  such  a  case,  it  is  clear  that  it  is 
the  further  intention  of  the  Legislature  that  a  tax  should 
be  imposed  in  this  case  as  if  the  condition  had  transpired 
whereby  the  fee  of  the  real  estate  will  pass  to  the  heirs 
of  the  deceased  brother  who  is  mentioned,  viz. :  as  if  the 
son  had  died  before  attaining  the  age  of  twenty-one. 

Such  a  proceeding,  in  my  opinion,  is  clearly  indicated 
by  this  statute  and  may  be  safely  followed  in  this  in- 
stance. 

If  any  other  contingency  should  happen,  as  mentioned 
in  the  will,  whereby  the  title  to  the  real  estate  will  be 
vested  in  another  person  whose  succession  thereto  is  tax- 
able at  a  lower  rate  than  that  of  the  heirs  of  the  deceased 
brother,  the  statute  further  contemplates  that  the  differ- 
ence in  the  amount  of  the  tax  that  would  be  paid  by  such 
person,  and  that  which  was  actually  paid  at  the  time  of 
the  proceedings  upon  the  supposed  succession  thereto  of 
the  heirs  of  the  deceased  brother,  may  be  recovered. 

Opinion  to  Staters  Attorney,  March  31st,  1910. 


383 


548.  Public  Administrator  Has  No  General  Duty 
to  Enforce  Inheritance  Tax  La\xr.  Public 
Administrator  Not  to  Enforce  Payment 
of  Inheritance  Taxes.  Must  Pay  Tax  on 
Estates  in  His  Hands. 

I  have  your  favor  of  the  17th  inst.,  stating  that  within 
the  past  few  years  persons  in  Carroll  County  have  died 
leaving  estates  subject  to  the  inheritance  tax,  prescribed 
by  the  Statutes  of  Illinois,  but  that  no  effort  has  been 
made  to  collect  same,  and  you  ask  my  opinion  whether  it 
is  your  duty  as  Public  Administrator  of  the  County  to 
take  steps  toward  the  collection  of  these  taxes. 

In  reply,  permit  me  to  call  your  attention  to  Section 
11  of  the  Inheritance  Tax  Law  (Hurd's  Revised  Statutes, 
1908,  paragraph  376,  chapter  120),  which  provides  that 
the  County  Judge,  on  the  application  of  any  interested 
party,  or  upon  his  own  motion,  shall  appoint  some  com- 
petent person  as  appraiser  as  often  as  or  whenever  oc- 
casion may  require,  who  shall  proceed  to  appraise  the 
property  of  the  deceased. 

When  the  tax  is  not  paid  as  provided  it  is  the  duty  of 
the  State's  Attorney  (in  counties  of  the  first  and  second 
class)  to  enforce  collection. 

In  my  opinion  it  is  no  part  of  your  official  duty  as  pub- 
lic administrator  to  enforce  the  payment  of  the  inherit- 
ance tax  except  as  estates  subject  thereto  come  into  your 
hands. 

Opinion  to  Public  Administrator,  February  18th, 
1909. 


384 

549.  A  Will  Is  Not  an  Asset  Within  the  Meaning 
of  Section  Nine  of  the  Inheritance  Tax  Act, 
and  May  Be  Removed  for  the  Purposes  of 
Probate  Without  the  Consent  of  the  Attor- 
ney General  and  State  Treasurer. 

Under  date  of  the  27th  inst.,  you  suhmit  the  question 
whether  a  will  may  be  taken  from  a  safety  deposit  box 
in  a  bank,  standing  in  the  name  of  a  decedent,  without 
giving  the  notice  mentioned  in  Section  9  of  the  Inherit- 
ance Tax  Act  of  1909.    You  state : 

**In  reading  the  law  today  I  see  nothing  in  it  that 
would  prohibit  us  from  allowing  the  heirs  or  the 
executor,  if  we  know  him,  from  opening  in  our  pres- 
ence, the  box,  if  they  saw  fit,  to  take  from  it  the 
will/' 

In  reply,  will  say  that  when  a  safety  deposit  box  stands 
in  the  name  of  a  deceased  person,  it  is  contemplated  by 
Section  9  of  the  Inheritance  Tax  Act  of  1909  that  control, 
or  partial  control  at  least,  of  the  cache,  passes  to  the 
person  or  institution  letting  the  box. 

That  person  or  institution  is  prohibited  from  making  a 
delivery  or  transfer  of  securities,  deposits  or  other  as- 
sets of  a  decedent,  so  under  its  possession  or  control,  un- 
less the  State  Treasurer  and  Attorney-General  consent 
thereto  in  writing ;  and  these  State  officers  are  authorized 
to  examine  the  contents  of  such  a  box.  This  amounts  to 
prohibiting  that  person  or  institution  from  permitting 
such  securities,  deposits  or  other  assets  to  pass  out  of 
such  control,  as  he  or  it  shall  have  in  the  premises,  with- 
out the  notice  or  consent. 

A  will  is,  of  course,  not  an  asset  in  any  sense  to  be  re- 
garded as  included  in  the  ^  *  securities,  deposits  or  other 
assets"  with  which  this  section  of  the  act  deals.  It  is  a 
testamentary  instrument  bearing  the  evidence  of  the  tes- 
tator's disposal  of  his  property. 


385 

It  is  provided  in  paragraph  12  of  chapter  148,  Hurd's 
Revised  Statutes,  1908,  that  any  person  or  persons  who 
have  in  possession  a  last  will  or  testament  of  another  for 
safe  keeping  or  otherwise,  shall  immediately  upon  the 
death  of  the  deceased  deliver  up  the  will  to  the  County 
Court,  under  penalty  for  withholding  the  same. 

Paragraph  2,  chapter  3,  of  the  same  revised  statutes, 
makes  it  the  duty  of  the  person  named  as  executor  of  a 
last  will  and  testament  to  cause  the  will  to  be  proved  and 
recorded  or  to  present  the  will  if  refusing  to  accept  the 
executorship. 

Section  9  of  the  Inheritance  Tax  Act  in  no  way  inter- 
feres with  a  discharge  of  these  duties  when  a  will  is  en- 
closed in  a  safety  deposit  box  standing  in  the  name  of  ihe 
testator  at  his  death.  The  will  may  be  withdrawn  from 
the  box  and  its  delivery  and  transfer  to  the  Court  of 
Probate,  to  be  proved  and  recorded,  is  in  no  manner  af- 
fected by  Section  9. 

That  section  relates  to  the  delivery  or  transfer  of  se- 
curities, deposits  or  other  assets,  and  the  burden  is  upon 
the  person  or  institution  which  has  control  or  possession 
in  any  way  of  that  property,  to  see  that  the  provisions  of 
the  Inheritance  Tax  Act  are  carried  out. 

While  the  will  may  be,  indeed  must  be,  delivered  with- 
out any  notice  or  consent,  as  I  view  the  law,  yet  no  se- 
curities, deposits  or  other  assets  mentioned  in  the  act  may 
be  delivered  or  transferred  without  such  notice  or  con- 
sent. 

Opinion,  January  28th,  1910. 

550.     "Widow's  Award  Is  Taxable. 

If  the  widow's  award,  taken  in  connection  with  other 
property  received  in  an  estate,  amounts  to  more  than 
$20,000.00  all  in  excess  of  $20,000.00  is  subject  to  a  tax. 


386 

**Is  the  widow's  award  exempt  from  taxation  un- 
der the  Inheritance  Tax  Law  ? ' ' 

While  the  Supreme  Court  of  this  State  has  never  dis- 
cussed this  precise  question,  it  has  impliedly  approved 
the  practice  of  taxing  the  widow's  award. 

In  the  case  of  Billings  v.  People,  189  111.  422,  the  widow 
renounced  the  provisions  made  for  her  in  the  will  and 
elected  to  take  her  dower  and  legal  share  under  the  stat- 
ute. The  County  Court  appointed  an  appraiser,  fixing 
the  fair  market  value  of  the  estate  for  the  purpose  of  as- 
sessing an  inheritance  tax. 

Among  other  things,  the  widow's  dower  and  award 
were  assessed  and  a  tax  fixed  upon  the  assessment. 

While  the  Supreme  Court  does  not  discuss  the  question 
of  the  right  to  levy  an  inheritance  tax  on  the  widow's 
award,  it  nevertheless  approves  the  finding  of  the  County 
Court  and  affirms  the  order  fixing  the  tax. 

In  view  of  this  decision  it  is,  therefore,  the  holding  of 
this  department  that  the  widow's  award  is  subject  to  the 
provisions  of  the  Inheritance  Tax  Law  and  liable  to  an 
inheritance  tax. 

Replying  to  yours  of  the  29th  ultimo.,  will  say  that  as  a 
general  proposition  is  is  the  holding  of  this  department 
that  the  widow's  award  is  subject  to  the  inheritance  tax. 

It  is,  therefore,  my  opinion  that  the  award  of  five  thou- 
sand dollars,  to  which  you  have  referred,  is  to  be  con- 
sidered a  part  of  the  inheritance  which  the  widow  re- 
ceived in  the  estate  you  have  referred  to  and  that  if  the 
widow's  award,  together  with  the  remainder  of  the  de- 
cedent 's  estate  coming  to  the  hands  of  the  widow  amounts 
to  more  than  twenty  thousand  dollars,  then,  the  excess 
so  received  by  the  widow  over  that  amount  must  be  taxed. 
Opinion  to  State's  Attorney,  September  2d,  1910. 


387 

551.     Refund  of  Tax  Erroneously  Paid. 

Wliere  inheritance  tax  has  been  paid  and  covered  into 
the  State  Treasury,  the  Auditor  of  Public  Accounts  is 
not  justified  in  drawing  a  warrant  for  such  excess  in  the 
absence  of  an  appropriation  for  that  purpose. 

I  acknowledge  receipt  of  your  favor  of  the  17th  inst., 
enclosing  a  letter  from  the  County  Treasurer  of  Cook 
County,  together  with  a  certified  copy  of  an  order  of  the 
County  Court  of  Cook  County  directing  the  County  Treas- 
urer of  said  county  to  refund  the  sum  of  $31.59  to  Clotilde 
Hotz  and  the  sum  of  $31.59  to  Maximilian  Schmidt,  er- 
roneously paid  by  said  Clotilde  Hotz  and  said  Maximil- 
ian Schmidt  on  account  of  the  inheritance  tax. 

It  appears  from  the  correspondence  and  from  the  order 
that  an  inheritance  tax  was  levied  and  assessed  in  the 
matter  of  the  estate  of  Leonard  Schmidt,  deceased.  It 
further  appears  that  the  tax,  as  levied  and  assessed  by 
the  County  Court  of  Cook  County  was  paid  to  the  County 
Treasurer  and  was,  by  the  County  Treasurer,  paid  to  the 
State  Treasurer.  After  the  payment  of  the  tax  to  the 
State  Treasurer  it  was  discovered  that  certain  real  es- 
tate was  erroneously  appraised  and  assessed  as  the  prop- 
erty of  said  decedent  at  the  time  of  his  death,  while,  as 
a  matter  of  fact,  said  property  was  not  subject  to  taxa- 
tion under  the  Inheritance  Tax  Law. 

On  account  of  such  erroneous  appraisement  and  as- 
sessment, Clotilde  Hotz  and  Maximilian  Schmidt  each 
paid  the  sum  of  $31.59. 

The  question  presented  by  the  correspondence  is,  so 
far  as  it  affects  any  official  act  to  be  performed  by  the 
Auditor  of  Public  Accounts,  as  to  whether  or  not  you 
have  any  authority  to  draw  a  warrant  on  the  State 
Treasurer  for  the  restitution  to  the  two  claimants  named 


388 

in  the  correspondence  of  the  sum  so  found  to  have  been 
paid  erroneously  by  said  claimants  on  account  of  the  in- 
heritance tax. 

It  may  be  conceded  that  the  tax  was  erroneously  levied 
and  assessed.  It  may  further  be  conceded  that  the  tax 
was  erroneously  paid  to  the  County  Treasurer,  and  by 
him  erroneously  paid  to  the  State  Treasurer.  In  other 
words,  it  may  be  conceded  that  said  claimants  have  a 
right  to  the  refund  of  the  amount  so  erroneously  paid 
by  them  by  reason  of  paragraph  375  of  chapter  120, 
Kurd's  Revised  Statutes,  1909,  the  same  being  section 
10  of  the  inheritance  tax  act  of  1909,  which  provides : 

^^When  any  amount  of  said  tax  shall  have  been 
paid  erroneously  to  the  State  Treasurer,  it  shall  be 
lawful  for  him,  on  satisfactory  proof  rendered  to 
him  by  said  County  Treasurer  of  said  erroneous  pay- 
ments to  refund  and  pay  to  the  executor,  adminis- 
trator or  trustee,  person  or  persons  who  have  paid 
any  such  tax  in  error,  the  amount  of  such  tax  so 
paid,  provided  that  all  applications  for  the  repay- 
ment of  said  tax  shall  be  made  within  two  years  from 
the  date  of  said  payment. ' ' 

The  money  so  paid  by  said  claimants  has  been  cov- 
ered into  the  State  Treasury. 
It  is  a  provision  of  our  fundamental  law  that: 

**No  money  shall  be  drawn  from  the  treasury  ex- 
cept in  pursuance  of  an  appropriation  made  by  law, 
and  on  presentation  of  a  warrant  issued  by  the  Audi- 
tor thereon.''  (Section  17,  Article  IV  of  the  Consti- 
tution.) 

It  cannot  be  maintained,  I  think,  that  section  10  of  the 
inheritance  tax  act  of  1909,  above  quoted,  makes  any 
appropriation  to  pay  amounts  erroneously  paid  into  the 
State  treasury  on  account  of  inheritance  tax  act. 

The  most  that  can  be  claimed  under  said  section  is, 
that  the  amounts  so  erroneously  paid  constitute  valid 


389 

claims  against  the  State,  which  may  be  paid  on  the  war- 
rant of  the  Auditor  of  Public  Accounts  when  the  Legis- 
lature shall  have  made  an  appropriation  for  such  pay- 
ment. 

The  question  then  is,  as  to  whether  or  not  the  Legis- 
lature in  1909  made  an  appropriation  to  pay  the  amount 
of  taxes  levied  and  assessed  under  the  inheritance  tax 
act  of  1909  and  erroneously  paid  into  the  State  treasury. 

The  only  clause  in  any  appropriation  act  which  might 

be  said  in  any  way  to  bear  upon  this  proposition  is  Clause 

30  of  Section  1  of  the  act  to  provide  for  the  ordinary  and 

contingent  expenses  of  the  State  government,  approved 

June  6,  1909,  in  force  July  1,  1909  (Session  Laws,  1909) 

(page  83),  which  reads  as  follows: 

^^T'o  the  State  Treasurer,  such  sums  as  may  be 
necessary  to  refund  the  taxes  on  real  estate  sold  or 
paid  on  error  and  for  overpayment  of  collector's 
account  under  laws  governing  such  cases,  to  be  paid 
out  of  the  proper  funds. '* 

Upon  a  consideration  of  this  clause  of  the  appropria- 
tion act,  it  is  my  opinion  that  it  does  not  relate  to  erro- 
neous payments  made  under  the  inheritance  tax  act  but 
relates  to  payments  made  under  the  general  revenue  act. 

It  is  my  opinion,  therefore,  that  under  the  law  as  it 
now  stands,  you  have  no  authority  to  issue  a  warrant 
on  the  State  Treasurer  for  the  payment  of  the  two  claims 
mentioned  in  the  correspondence  submitted  by  you. 

Said  claims  have,  I  think,  a  valid  claim  against  the 
State,  but  such  claim  cannot  be  paid  until  the  Legislature 
shall  have  made  provision  for  their  payment  by  the  en- 
actment of  an  appropriation  act. 

Opinion  to  State  Auditor,  May  20,  1910. 


390 

552.     Partnership  Assets  in  Foreign  State  When 
Oixrned  by  Deceased  Resident  of  Illinois. 

The  interest  of  a  resident  decedent  in  a  partnership 

estate  in  a  foreign  estate  should  be  taxed  in  this  State 

under  the  inheritance  tax  law  for  its  fair  cash  value  at 

the  time  of  death. 

*^A  person  died  a  resident  of  Illinois,  who  was  a 
partner  in  a  cattle  ranch  in  another  state ;  is  his  in- 
terest in  the  cattle  on  such  ranch  subject  to  the  in- 
heritance tax  of  Illinois ' '  ? 

Eeplying  thereto,  I  would  state  that  under  Section  1 
of  the  Inheritance  Tax  Act,  all  property  which  shall  pass 
by  will  or  by  the  intestate  laws  of  this  State  from  any 
person  who  may  die  seized  or  possessed  of  the  same  while 
a  resident  of  this  State  at  the  time  of  his  death  shall  be 
subject  to  an  inheritance  tax  at  the  rates  prescribed  in 
the  statute. 

I  assume  that  the  decedent  died  intestate.  Under  the 
law,  the  death  of  said  decedent  dissolved  the  partnership. 
The  surviving  partner  or  partners  will  proceed  to  wind 
up  the  partnership  and  will  pay  and  discharge  the  part- 
nership by  liabilities.  After  all  the  partnership  liabilities 
are  discharged,  the  assets  will  be  divided  among  the  sur- 
viving partners  in  proportion  to  their  respective  shares 
as  fixed  by  the  partnership  agreement.  If  the  partner- 
ship assets  are  personal  property,  then  such  personal 
property  would  pass,  after  discharging  the  debts  and  lia- 
bilities against  it,  in  the  foreign  jurisdiction  under  the 
laws  of  the  State  of  Illinois.  That  being  the  case,  the 
interest  of  the  decedent  in  the  partnership  estate  should 
be  taxed  in  this  State  under  the  Inheritance  Tax  Law  for 
its  fair  cash  value  at  the  time  of  the  death  of  the  de- 
ceased partner. 

Opinion  to  Staters  Attorney,  March  26th,  1909. 


391 


CHAPTER  XXX. 


Forms — Tax  Law  of  1895  as  Amended  in  1901 — Court  of 
Claims'  Decision  on  Eefund  of  Tax. 


553.  Form  Composition  Agreement. 
553a.  Petition     for     Appeal     from 

County    Judge's    Order     of 
Tax. 
553b.  Order  Allowing  Appeal  from 
County    Judge's    Order    to 
County  Court. 

554.  Bond  —  Appeal     to     County 

Court. 

555.  Order    of    County   Judge    Ap- 

pointing Appraiser. 

556.  Oath  of  Appraiser. 

557.  Appraiser's    Notice    of    Hear- 

ing. 

558.  Appraiser's  Eeport. 

559.  Appraiser's    Eeport — Schedule 

One. 

560.  Appraiser's    Report — Schedule 

Two. 

561.  Appraiser's    Report — Schedule 

Three. 

562.  Appraiser's    Report — Schedule 

Four. 


Report   —  Sum- 
Report — Schedule 


563.  Appraiser's 

mary. 

564.  Appraiser's 

Five. 

565.  Appraiser's    Report  —  Exhibit 

*' A.  "—Certificate   of  Serv- 
ice— Process. 

566.  Appraiser's   Report — Close    of 

Report. 

567.  Order  of  Tax. 

568.  Order    Fixing    Tax — Distribu- 

tion. 

569.  Close  of  Order. 

570.  County     Judge's     Notice     of 

Tax. 

571.  County  Judge's  Certificate  of 

Mailing    Notice    to    Person 
Taxed. 

572.  Inheritance  Tax  Law  of  1895, 

as  amended  1901. 

573.  Opinion  of  Court  of  Claims  in 

Griffith  ex.  vs.  State  of  Illi- 
nois. 


553. 


Form   Composition  Agreement. 


State  of  Illinois,  | 
CoTJifTY  OF  Cook.   J  ^®* 

In  the  Matter  of  the  Estate  J     Composition  Agreement  under  Section 

OF  f         26  of  the  Inheritance  Tax  Law  of 

JOHN  JONES,  Deceased.       *         Illinois,  in  force  July  1st,  A.  D.  1909. 

Whereas,  the  said  decedent,  John  Jones,  died  testate  on  September 
15tli,  A.  D.  1907,  a  legal  resident  of  the  City  of  Chicago,  County  of 
Cook  and  State  of  Illinois,  leaving  him  surviving,  as  his  only  heirs  at 
law  and  next  of  kin,  Mary  Jones,  his  widow,  and  Margaret  Smith,  also 
known  as  Margaret  Louise  Smith,  his  granddaughter,  the  legal  rela- 
tionship stated  being  evidenced  by  proof  of  heirship  made  by  the  Pro- 
bate Court  of  Cook  County:   that  said  Mary  Jones  was  born  on  the 

day  of ,  A.  D ,  and  is  now  living; 

that  said  Margaret  Smith  was  born  on  the day  of 

,  A.  D ,  and  is  now  living;  that  there  is  no  reasonable 

ground  for  a  belief  that  either  or  both  of  them  will  decease  prior  to 
that  expectancy  stated  in  recognized  tables  of  mortality  to  be  their 
respective  period  of  life; 

And  whereas,  said  decedent  left  a  last  will  and  testament  (no  co- 


392 

docils),  which  was  duly  admitted  to  probate  in  the  Probate  Court  of 
Cook  County,  Illinois,  and  Letters  Testamentary  thereon  issued  by 
said  Court  to  Richard  Green  and  Joseph  Green,  both  of  said  City  of 
Chicago,  as  Executors,  who  have  since  been  discharged  from  further 
duty  as  Executors; 

And  whereas,  said  Richard  Green  of  Chicago,  James  Baldwin  of 
Philadelphia,  Pennsylvania,  and  Edward  Webster  of  New  York  City, 
New  York,  were  by  said  last  will  nominated  Trustees  of  the  residuary 
estate  therein  mentioned,  and  have  accepted  the  trust  so  created  by 
said  will  and  are  now  acting  as  trustees  thereunder; 

And  whereas,  Mary  Jones,  widow,  has  accepted  the  provisions  of 
the  will;  and  no  legal  contest  has  been  instituted  questioning  or  at- 
tacking the  validity  of  said  will; 

And  whereas,  inheritance  tax  proceedings  in  the  matter  of  dece- 
dent's estate  were  regularly  instituted  by  the  County  Judge  of  Cook 
County,  Illinois,  on,  to-wit,  the  15th  day  of  November,  A.  D.  1907,  by 
the  appointment  of  an  appraiser  under  the  act  to  Tax  Gifts,  Legacies 
and  Inheritances,  etc.,  in  force  July  1st,  A.  D.  1895,  and  the  amend- 
ments thereto; 

And  whereas,  said  appraiser  proceeded  with  his  appraisement  and 
made  written  report  to  said  County  Judge  as  by  law  provided,  which 
said  report  was  filed  with  the  Clerk  of  the  County  Court  of  Cook 
County,  Illinois,  in  appraisement  case  No,  88686;  that  on,  to-wit,  the 
29th  day  of  December,  A.  D.  1907,  said  County  Judge  entered  an 
Order  approving  said  report  and  fixing  the  tax  chargeable  to  the  trans- 
fers and  successions  then  ascertainable,  and  further  fixed  the  net  value 
of  all  property  appraisable  by  reason  of  the  death  of  said  John  Jones, 
and  of  all  property  owned  by  decedent  at  death,  in  the  sum  of  One 
Million  Dollars  ($1,000,000). 

That  the  findings  and  order  of  said  County  Judge  were  and  are  so 
far  as  material  in  this  proceeding,  as  follows: 

Total  net  property  owned  by  decedent  at  death,  or  appraisable  by 
reason  of  his  death.  One  Million  Dollars  ($1,000,000.00). 

(Net  personal,  $250,000.00,  and  Net  Real  Estate,  $750,000.00.) 

Distribution  for  Taxation. 

Value  of 
Succession.  Exemption.  Rate.        Tax. 
Albert  Brown,  stranger  in  blood 

by  paragraph  c,  article  2  of  will.$25,000.00  None        5%     $1,250.00 

Susan  Moore,  niece  by  paragraph 

d,  article  2  of  will 36,000.00     $2,000.00        2%  680.00 

Maurice     Black,     husband     of     a 

daughter  of  decedent,  by  arti- 
cle 8  of  will 15,000.00     20,000.00        1%  None 

Margaret    Smith,   age    . .    years, 

also  known  as  Margaret  Louise 

Smith,  granddaughter. 
Life  use  of  one-third  of  residuary 

estate  which  is  limited  by  the 

fourth    article    of    the    will — 

present  value    195,000.00    20,000.00        1%      1,750.00 

Mary  Jones,  widow,  age  . .  years ; 

life  use  of  two-thirds  of  resid- 
uary estate  as  limited  by  the 

fourth   article    of    the   will — 

present  value   245,000.00     20,000.00        1%       2,250.00 


393 

And  whereas,  said  order  of  tax  so  entered  by  said  County  Judge 
further  found,  as  follows: 

"That  the  residue  of  the  estate  of  decedent  after  distribution  of 
legacies,  equals  the  sum  of  $924,000.00,  to  which  is  chargeable  the  life 
estates  of  the  widow  and  granddaughter.  That  the  remainder  and  re- 
mainders in  said  residuary  estate  are  transferred  contingently  and  con- 
ditionally and  are  not  indefeasibly  vested. 

It  is  therefore  ordered  that  the  tax  on  the  succession  to  said  residue, 
subject  to  the  life  estates  thereinbefore  described,  and  the  remainder 
and  remainders  herein  be  and  the  same  is  hereby  postponed,  and  it  is 
ordered  that  the  tax  on  said  residue  be  imposed  in  the  future  according 
to  law." 

And  whereas,  the  fourth  article  (residuary  clause)  of  said  will  is 
in  words  and  figures  as  follows: 

(Set  out  provisions  of  will  disclosing  character  of  the  limitation.) 

And  whereas,  said  Trustees,  Richard  Green,  James  Baldwin  and 
Edward  Webster,  trustees,  above  described,  are  all  and  each  of  them 
now  desirous  of  settling  the  remaining  claims  of  the  People  of  the 
State  of  Illinois  upon  or  in  respect  to  the  transfer  of  or  succession  to 
all  the  property  described  and  referred  to  in  article  four  of  said  will, 
to-wit,  all  the  rest,  residue,  remainder  and  remainders  in  said  estate, 
not  taxed  in  the  appraisement  aforesaid,  and  are  desirous  of  settling 
the  remaining  claims  of  said  The  People,  etc.,  to  any  tax  thereon,  which 
is  now  chargeable  and  hereafter  payable  under  the  laws  of  the  State 
of  Illinois,  by  settling  and  compounding  all  such  taxes  upon  terms 
which  are  just  and  equitable;  and  it  is  desired  by  said  trustees,  that 
the  property  constituting  said  trust  estate,  together  with  the  right  to 
receive,  take  and  hold  said  property  under  and  by  the  terms  of  said 
will,  and  the  laws  of  the  State  of  Illinois,  be  granted  full  and  complete 
discharge  on  account  of  all  liability  for  inheritance  taxes  by  and  upon 
the  payment  of  a  sum  of  money  hereinafter  fixed  in  this  composition 
agreement  in  pursuance  of  the  law  in  such  case  made  and  provided: 

Whereas,  all  life  tenants  are  living  at  the  time  of  the  execution  of 
this  instrument,  and 

Whereas,  no  estates  or  interests  unappraised  or  untaxed  in  the 
appraisement  proceeding  have  since  indefeasibly  vested  nor  have  the 
beneficiaries  become  known  or  can  they  be  identified. 

Now,  therefore,  in  consideration  of  the  foregoing,  and  by  virtue 
of  the  powers  and  authority  granted  by  the  provisions  of  Section  26 
of  the  Inheritance  Tax  Law  in  force  July  1st,  1909: 

It  is  hereby  agreed  and  settled  upon,  that  all  inheritance  tax  and 
taxes  and  interest  thereon,  on  the  succession  or  successions  to,  right 
to  receive,  take  and  hold  all  and  every  part  and  parcel  of  the  property 
on  which  the  tax  was  postponed  by  the  County  Judge's  Order  of  Tax 
entered  on  said  29th  day  of  December,  A.  D.  1907,  be  and  the  same  is 
hereby  determined,  compounded,  settled  and  adjusted  at  the  total  sum 
of  Nine  Thousand  Six  Hundred  Eighty  Dollars  ($9,680.00). 

This  composition  and  settlement  being  determined  by  subtracting 
the  total  present  value  of  the  life  estates  charged  to  the  residuary  es- 
tate, from  the  total  value  of  the  residuary  estate,  the  difference  or 
remainder  (constituting  the  untaxed  property)  being  assumed  to  be 
the  subject  of  a  transfer,  by  the  exercise  of  the  power  created  in  the 
widow,  to  one  ultimate  taker  in  the  lineal  line  of  descent  from  her 
and  taxing  such  succession  at  2  per  cent,  without  exemption,  or  dis- 
count for  immediate  payment. 

Which  said  sum  of  $9,680.00  it  is  mutually  agreed  shall  be,  and  is 


394 

hereby,  determined  a  just  and  equitable  sum  of  money  to  be  received 
by  the  State  of  Illinois,  its  oflScers  and  agents,  in  full  payment,  settle- 
ment and  discharge  of  all  inheritance  or  succession  taxes  and  interest 
thereon,  which  are  payable  or  which,  but  for  this  agreement,  might 
at  any  time  hereafter  become  due  and  payable  to  the  State  of  Illinois, 
or  its  officers  or  agents  in  its  behalf,  under  and  by  virtue  of  the  laws 
thereof,  upon  or  in  respect  to  the  inheritance  or  successions  to  the 
property  or  estate  of  the  above  named  decedent,  and  upon  the  right  to 
receive,  take  and  hold  any  of  said  property  under  the  terms  and  pro- 
visions of  the  will  of  said  decedent,  and  under  the  powers  of  appoint- 
ment in  said  will  created,  which  is  hereinabove  referred  to  as  compro- 
mised, and  which  said  successions  and  taxes  and  interest  thereon  have 
become  fully  settled  and  compounded  and  adjusted  by  the  execution  of 
this  compromise  agreement  upon  the  payment  of  the  said  sum  of  $9,- 
680.00  to  the  County  Treasurer  of  Cook  County,  Illinois,  as  provided  by 
Section  26  of  the  Act  to  Tax  Gifts,  Legacies,  Inheritances,  Transfers, 
Appointments  and  Interests  in  Certain  Cases,  etc.,  in  force  July  1st, 
A.  D.  1909; 

And  the  said  State  Treasurer  of  Illinois,  by  and  with  the  consent  of 
the  said  Attorney  General  of  said  State,  expressed  in  writing,  hereby 
grants  full  and  complete  discharge  to  said  trustees  upon  the  payment 
by  them  to  the  County  Treasurer  of  Cook  County,  Illinois,  of  the 
amount  of  $9,680.00. 

In  witness  whereof,  the  said  Richard  Green,  James  Baldwin  and 
Edward  Webster,  acting  as  and  in  their  capacity  of  trustees  under  the 

will  of  John  Jones,  deceased,  and  the  Hon ,  as 

State   Treasurer   of   Illinois,   by   and   with   the   consent   of   the   Hon. 

,  as  Attorney  General  of  the  State  of 

Illinois,  who  evidences  his  consent  hereto  in  writing  by  joining  in  the 
execution  hereof,  have  signed  and  acknowledged  the  execution  of  these 

presents  in  triplicate,  this day  of ,  A.  D. 

1912. 

(L.S.) 

(L.  s.) 

(L.S.) 

(L.8.) 

As  State  Treasurer  of  Illinois. 
Approved  this day  of A.  D.  1911. 

Attorney  General  of  the  State  of  Illinois. 
Recommended  by 

Inheritance  Tax  Attorney  of  Cook  County,  Illinois. 


395 

553a.     Petition  for  Appeal  from  County  Judge's 
Order  of  Tax. 

In  the  County  Cotjet  of County. 

State  of  Illinois, 
County  of ^^* 


1 


In  the  Mattee  of  the  Estate 

OF  ^  No. 

JOHN  JONES,  Deceased. 

PETITION  PRAYING  APPEAL:  AND  ORDER. 

To  the  Honorable , 

Judge  of  the  County  Court  of County. 

Your  petitioners,  John  Doe  and  Richard  Roe,  executors  of  the  last 
will  and  testament  of  John  Jones,  deceased,  respectfully  represent  that 

Your  Honor  did,  as  County  Judge,  on  December ,  A.  D , 

enter  an  order  of  tax  and  approve  the  Appraiser's  report  in  the  ap- 
praisement of  the  estate  of  said  decedent,  John  Jones  (appraisement 
No.  7537),  which  said  order  identified  and  determined  the  relationships 
of  the  beneficiaries  taking  by  the  will  and  codicils  of  said  decedent,  and 
of  all  persons,  corporations  and  transferees  taking  property  or  interests 
appraisable  by  reason  of  the  death  of  said  decedent;  and  determined 
the  values  of  the  successions  of  and  transfers  and  gifts  to,  said  bene- 
ficiaries and  persons,  corporations  and  transferees,  and  the  tax  on  the 
respective  successions,  transfers  and  gifts  thereof,  and  that  said  order 
was  entered  on  the  recommendation  of  said  Appraiser. 

Your  petitioners  further  represent  that  they  are  dissatisfied  with  the 
recommendations  of  the  Appraiser,  and  are  dissatisfied  with  all  and 
each  of  the  findings  contained  in  said  Order  of  Tax,  above  referred  to. 

Your  petitioners  insist  that  Your  Hoonr,  as  County  Judge,  erred  in 
said  Order  of  Tax,  in  determining  the  relationships  of  the  various  bene- 
ficiaries and  persons. 

And  erred  in  determining  the  value  of  the  successions,  transfers  and 
gifts  of  each  and  all  of  the  beneficiaries  and  persons. 

And  erred  in  determining  the  statutory  exemption  of  each  and  all 
beneficiaries  and  persons. 

And  erred  in  fixing  the  amount  of  tax  on  each  succession,  transfer 
and  gift  and  the  rate  of  tax  thereon. 

And  further,  that  Your  Honor,  as  County  Judge,  erred  in  approving 
the  report  of  the  Appraiser;  and  erred  in  approving  the  values  of  the 
property  appraisable  by  reason  of  the  death  of  John  Jones,  as  recom- 
mended by  the  Appraiser. 

(Set  forth  in  general  terms  the  principal  objections.) 

Your  petitioner  states  that  the  tax  fixed  in  the  order  appealed  from 
has  been  paid  (or  not  paid,  as  the  case  may  be). 

Your  petitioners,  therefore,  pray  that  an  appeal  be  allowed  to  the 

County  Court  of County,  from  said  Order  of  Tax,  pursuant 

to  the  statute  in  such  case  made  and  provided. 


Executors  of  the  last  will  and  testament 
of  John  Jones,  Deceased. 

(Or  individual,  as  the  case  may  be.) 


396 

553b.     Order     Allowing     Appeal     from      County 
Judge's  Order  to  County  Court. 

In  the  County  Coubt  of County. 

State  of  Illinois,         i 
County  of I  ^^' 


In  the  Matter  of  the  Estate  ] 

OF  >  No 

JOHN  JONES,  Deceased.       ' 

ORDER. 

On  the  petition  of  John  Doe  and  Richard  Roe,  executors  of  the  estate 
of  said  decedent,  John  Jones,  an  appeal  is  hereby  allowed  to  the  County 

Court  of County,  Illinois,  from  the  County  Judge's  Order 

of  Tax  entered  December ,  A.  D ,  in  appraisement 

No ,  on  filing  with  the  Clerk  of  this  Court  on  or  before  the 

day  of ,  a  good  and  sufficient  bond  in  the 

sum  of dollars,  to  be  approved  by  the  Court 

on  or  before  the  date  last  above  named. 


Judge  of  the  County  Court  of County. 

Entered (Date.) 

554.  Bond — Appeal  to  County  Court. 

State  of  Illinois, 


"■} 


County  of  Cook.    ^     ' 

In  the  County  Court  of  Cook  County,  Illinois. 
In  the  Matter  of  the  Estate 

OF 

JOHN  DOE,  Deceased. 

Know  all  men  by  these  presents,  that 

of  Chicago,  Illinois,  Executor  of  the  Last  Will  and  Testament  of  John 

Doe,  deceased,  as  principal,  and  

of  New  York,  a  surety  company  duly  authorized  to  do  business  in  Illi- 
nois, and  execute,  sustain,  assume  and  pay  liabilities  or  penalties  as  a 
bonding  or  surety  company,  with  an  officer  and  representative  at  Chi- 
cago, Illinois,  as  surety,  are  held  and  firmly  bound  to  the  People  of 
the  State  of  Illinois,  in  the  penal  sum  of  Twenty  Thousand  Dollars,  for 
the  payment  of  which,  well  and  truly  to  be  made,  we  and  each  of  us  do 
bind  ourselves,  our  heirs,  executors,  administrators,  successors  and 
assigns,  jointly,  severally  and  firmly  by  these  presents. 

Signed,  sealed  and  delivered  this day  of , 

A.  D 

The  condition  of  this  obligation  is  such  that  whereas  the  Honorable 
John  E.  Owens,  as  County  Judge  of  said  Cook  County,  did,  on  the 

day  of ,  A.  D ,  enter  an  order  on 

the  report  of  his  Inheritance  Tax  Appraiser  in  the  above  named  estate 
approving  the  report  of  said  Appraiser  in  all  its  findings  (or  except  as 


397 

otherwise  provided  in  said  order),  and  fixing  the  amount,  value,  dis- 
tribution and  tax  in  said  estate. 

And  whereas  the  tax  so  fixed  and  determined  by  said  County  Judge's 
order  has  been  paid  to  the  County  Treasurer  of  County. 

(Or — And  whereas  the  tax  so  fixed  and  determined  'by  said  County 
Judge's  order  has  not  been  paid.) 

And  whereas  the  said  executor  (or  beneficiary,  etc.)  has  prayed  for 
and  obtained  an  appeal  from  the  appraisement  and  the  order  fixing  tax 
aforesaid  to  the  County  Court  of  Cook  County,  Illinois. 

Now,  THEREFORE,  if  the  Said  principal 

shall  prosecute  this  appeal  with  effect,  and  moreover  pay  any  and  all 
taxes  (if  any)  determined  to  be  due.  The  People  of  the  State  of  Illinois 
by  reason  of  the  death  of  said  John  Doe,  deceased,  on  the  parties, 
rights,  interests,  successions  and  transfers  appraisable  by  reason  of  the 
death  of  said  decedent  (or  if  beneficiary  appeals — pay  all  taxes  deter- 
mined to  be  chargeable  against  him),  and  pay  the  amount  of  the  costs 
that  may  be  rendered  against  him  in  this  appeal,  then  this  obligation 
to  be  void;  otherwise  to  remain  in  full  force  and  virtue. 


(seal.) 

Executor  of  the  Last  Will  and 
Testament  of  John   Doe,   Deceased. 


Surety  Company, 

By  C.  Bratjne,   (seal.) 

Resident  Vice-President. 
O.   R.   Braune,    (seal.) 
Resident  Assistant  Secretary. 

Approved  this day  of ,  A.  D 

County  Judge. 
555.  Order  Appointing  Appraiser. 

State  of  Illinois, 


)■ 


Cook  County  ''*® 

Before  the  Hon.  John  E.  Owens,  County  Judge  of  Cook  County. 

In  the  Matter  of  the  Estate    .  Inheritance  Tax 
of                           >       Appraisement. 
,  Deceased.    '  No 

It  appearing  that,  by  reason  of  the  death  of  said  deceased,  there 
is  property  appraisable  under  the  provisions  of  the  statutes  of  this 
State  relating  to  the  taxation  of  gifts,  legacies,  inheritances,  transfers, 
appointments  and  interests  in  certain  cases;  now,  in  pursuance  of  said 
statutes  in  such  case  made  and  provided: 

It  is  hereby  ordered,  That  

of  the of ,  in  said  county,  be  and  he  is 

hereby  appointed  appraiser  herein  for  the  purpose  of  fixing  the  fair 
market  value  of  the  property  appraisable  by  reason  of  the  death  of 

said  ,  alleged  to  have  died  a  resident  of  the 

County  of ,  State  of and  that 

said  appraiser,  before  entering  upon  the  duties  of  his  ofllce,  take  and 


398 

file  on  oath  with  the  clerk  of  said  court  to  faithfully  and  fairly  perform 
the  duties  of  such  appraiser  according  to  law. 

It  is  fuethee  oedeeed,  That  said  appraiser  give  ten  days'  notice  in 
writing,  by  mail  postpaid,  to  the  County  Treasurer  of  Cook  County, 
Illinois,  the  Inheritance  Tax  Attorney  for  said  Cook  County  and  all 
other  parties  in  interest,  and  that  said  appraiser  make  such  investiga- 
tion as  is  proper  and  necessary  in  the  premises. 

It  is  fuethee  oedeeed,  That  said  appraiser  make  a  just  and  true 
report  of  his  proceedings,  and  return  same  to  the  County  Judge  of  said 
Cook  County;  together  with  the  evidence,  documentary  and  oral,  re- 
ceived by  him;  and  statements  taken  germane  to  the  subject-matter 
of  said  appraisement;  and  that  he  include  in  his  said  report,  in  addi- 
tion to  his  findings  of  value,  such  recommendations  relative  to  deduce 
tions,  distribution  for  taxation  or  exemption,  and  such  other  facts  and 
suggestions  as  are,  in  his  judgment,  material  in  the  premises. 

It  is  fuethee  oedeeed,  That  said  appraiser  prepare  and  present  to 
said  County  Judge  at  the  time  of  the  return  of  his  said  report,  a  draft 
order  fixing  tax  based  upon  his  report,  showing  the  clear  cash  value 
of  all  estates,  annuities,  life  estates,  estates  for  term  of  years,  re- 
mainders, transfers,  gifts,  appointments  and  other  interests  taxable 
or  exempt,  and  at  what  rate  the  same  appear  to  be  taxable  under  the 
law  of  this  State,  and  the  tax  assessable. 

And  it  is  fuethee  oedeeed,  That,  for  the  purpose  of  such  appraisal, 
said  appraiser  is  hereby  authorized  to  issue  subpoenas  for  and  to 
compel  the  attendance  of  witnesses  before  him,  and  to  take  the  evidence 
of  such  witnesses  under  oath  concerning  all  matters  germane  to  said 
appraisement. 

And  it  is  fuethee  oedeeed,  That  said  appraiser  file  with  his  said  re- 
port a  statement,  under  oath,  showing  the  number  of  days  actually 
and  necessarily  spent  in  making  such  appraisal,  and  his  actual  and 
necessary  traveling  expenses,  together  with  the  fees  of  said  witnesses. 


County  Judge. 
556.  Oath  of  Appraiser. 


State  of  Illinois, 
County  of  Cook. 


[ss. 
Before  the  Hon.  John  E.  Owens,  County  Judge  of  Cook  County. 


In  the  Mattee  of  the  Estate 

OF  ]■  Docket  No. 
,  Deceased. 


:i 


I ,  appointed  appraiser  by  the  order 

of  the  County  Judge  of  the  County  of  Cook,  do  hereby  swear  that  I 
will  faithfully  and  fairly  perform  the  duties  of  such  appraiser  accord- 
ing to  law,  and  make  a  just  and  true  report  of  my  proceedings  accord- 
ing to  the  best  of  my  understanding. 

Subscribed  and  sworn  to  before  me,  this  day  of 

191.... 


399 
557.  Appraiser's  Notice  of  Hearing. 

I  If  THE  MATTEB  of  the  ESTATE 


(Docket  No. 


To  all  persons  interested  in  said  estate — 

Having  been  appointed  Appraiser  in  the  above  entitled  matter,  by 
the  County  Judge  of  the  County  of  Cook,  State  of  Illinois,  I  hereby 

notify  you  that  on  the day  of ,  190 , 

at   o'clock  in  the   noon  of  that  day,  at 

in  the 

City  of  Chicago,  111.,  I  will  proceed  to  appraise  and  fix  the  value  of  all 
property  appraisable  by  reason  of  the  death  of  the  decedent,  under 
and  pursuant  to  the  Inheritance  Tax  Laws  of  Illinois. 

Dated  this day  of ,  19 


Appraiser. 


558.  Appraiser's  Report. 

[S,  ] 

[ss. 


State  of  Illinois, 
County  of  Cook 


Before  the  Hon .,  County  Judge  of  Cook  County. 

In  the  Matter  of  the  Estate   ^  Inheeitance  Tax 
of                           I       Appraisement. 
Deceased.    )  No 

To  the  HonoraMe  ,  County  Judge. 

I,  the  undersigned,  who  was  on  the day  of , 

19.,..,  appointed  appraiser  to  conduct  an  appraisement  under  and 
pursuant  to  "an  Act  to  tax  gifts,  legacies,  inheritances,  transfers,  ap- 
pointments and  interests  in  certain  cases,"  etc.,  approved  June  14, 
1909,  in  force  July  1,  1909,  and  to  fix  the  fair  market  value  of  the 
property  appraisable  by  reason  of  the  death  of  said  decedent,  respect- 
fully report  as  follows: 

First.  Forthwith  after  said  appointment  I  proceeded  to  investi- 
gate all  property  appraisable  as  aforesaid,  and  gave  notice  by  mail 
to  all  parties  in  interest  in  said  appraisement  of  the  time  and  place 
at  which  I  would  conduct  said  proceedings. 

Service  of  said  notice  is  evidenced  by  an  affidavit  marked  Exhibit 
"A"  hereto  attached  and  made  a  part  hereof. 

Second.     At  the   time   and  place   in  said  notice   stated,   to-wit,   at 

in  the 

City  of  Chicago,  Illinois,  at  the  hour  of m.  on  the 

day  of    ,   19 ,   and   thereafter   from   time  to   time, 

pursuant  to  adjournments  regularly  had,  I  proceeded  to  the  appraise- 
ment of  said  property,  and  to  take  evidence  in  writing  under  oath  of 
all  witnesses  produced  concerning  the  subject-matter  of  said  appraise- 
ment, which  depositions  are  hereto  attached  and  made  a  part  of  this 
report,  together  with  all  documentary  evidence  produced;  and  together 
with  a  statement  of  all  independent  investigations  made  by  me;  and 


400 

all  general  information  germane  to  the  subject-matter  of  said  appraise- 
ment: all  hereto  attached. 

And  from  said  evidence  and  investigation  I  find  that  the  fair  market 
value  of  said  property  appraisable  as  aforesaid  to  be  as  hereinafter 
stated. 

I  also  report,  as  shown  by  the  documentary  and  other  evidence 
herein  contained,  the  various  successions,  estates,  annuities,  gifts, 
transfers,  appointments,  interests,  etc.,  subject  to  taxation  or  exemp- 
tion under  the  laws  of  this  State  in  such  case  made  and  provided, 
and  recommend  their  taxation  and  exemption  according  to  the  distribu- 
tion and  assessment  hereinafter  made. 

559.  Appraiser's  Report — Schedule  I. 

Estate  of   ,  Deceased. 

Date  of  decedent's  death 

Residence  of  decedent 

Testate  Intestate 

Record  of  will,  Book  Page 

Date  of  Letters 

Names,  titles  and  addresses  of  legal  representatives,  etc. 


Names  of  persons  appearing  at  appraisement  in  behalf  of  estate 


Names  of  persons  appearing  in  behalf  of  State  of  Illinois 


560.  Appraiser's  Report — Schedule  II. 

INVENTORY. 

PROPERTY  PASSING  BY  WILL  OR  INTESTATE  LAWS. 
Property.  Items.  Fair  Market  Value. 


401 


561.  Appraiser's  Report — Schedule  III. 

TRANSFERS,  GIFTS,  APPOINTMENTS,  ETC. 
Property.  Fair  Market  Value. 


562. 


Appraiser's  Report— Schedule  IV. 


Estates,  Beneficiaries,    Appraised  Fair  Taxable 

and  Relationship  Market  Cash  Tax  Rec- 

Description  of  Property.        Value.  Exemption.  Value.  Rate,  ommended. 


563.  Appraiser's  Report — Summary. 

Pebsonal  Pboperty.  Real  Estate. 


Schedule  II,  Page  1. 

Schedule  II,  Page  1. 

Schedule  II,  Page  2. 

...   Schedule  II,  Page  2. 

Schedule  II,  Page  3. 

Schedule  II,  Page  3. 

Schedule  II,  Page  4. 

...   Schedule  II,  Page  4. 

Schedule  II,  Page  5. 

Schedule  II,  Page  5. 

Schedule  II,  Page  6. 

Schedule  II,  Page  6. 

Schedule  III,  Page  . 

...   Schedule  III  

Total  Personal 
Property    .    . 


Total  Real  Estate $ . 


Total  Personal  Property , 

Deductions — Debts  not  secured  on 

Real  Estate    

Court  Costs    , 

Executor's     or    Administrator's 

Fees   

Attorney's   Fees 

Total  Costs  of  Administration . , 
Total  Deductions  from  Personal 

Property    

Excess  of  Debts  over  Personalty . 

Net   Personal    Property 

Total  Real   Estate 

Incumbrances  on  Real  Estate . . . 
Excess  of  Debts  over  Personalty. 
Total  Deductions  from  Real  Es- 
tate    

Net  Value  of  Real  Estate 

Clear  Fair  Market  Value  of  Prop- 
erty found  appraisable  by 
reason  of  Decedent's  Death 


402 

564.  Appraiser's  Report — Schedule  V. 

SPECIAL  FINDINGS  AND  CONCLUSIONS. 


565.  Exhibit  "A." 

Certificate  of  Service  of  Process. 

State  of  Illinois,  1 

County  of  Cook.    J     ' 

Before  the  Hon ,  County  Judge  of  CooJc  County. 

In  the  Mattes  of  the  Estate   ^  Inhebitance  Tax 
OF                           V       Appraisement. 
,  Deceased.    )  No 

being  duly  sworn, 

doth  depose  and  say  that  he  is  the  same  person  who  was  heretofore 
appointed  appraiser  in  the  above  entitled  estate  by  the  County  Judge 

of  Cook  County,  Illinois;  that  on  the day  of , 

19 ,  he  duly  gave  notice  by  mail,  postpaid,  to  the  Treasurer  of  said 

Cook  County,  to  the  Inheritance  Tax  Attorney  for  said  Cook  County, 
and  to  the  following  named  persons,  viz.: 


the  same  being  the  only  parties  in  interest  in  said  appraisement,  that 

he  would,  as  such  appraiser,  on  the day  of 

19 ,  at o'clock  in  the noon  of  that  day,  at 

in  the  City  of  Chicago,  Illinois,  proceed  to  conduct  an  appraisement 
in  said  estate,  under  and  pursuant  to  the  statutes  of  the  State  of 
Illinois  relating  to  the  taxation  of  gifts,  legacies,  inheritances,  trans- 
fers, appointments  and  interests  in  certain  cases. 


Appraiser. 

Subscribed  and  sworn  to  before  me  this  ,  day  of 

,  A.  D.  19 


Notary  Pu'blic  in  and  for  Cook  County,  Illinois. 

566.  Appraiser's  Report. 

The  foregoing,  including  the  several  schedules  herein,  together 
with  Exhibits  "A"  and  "B"  hereto  attached,  constitutes  a  full  and 
correct  report  of  said  appraisement  as  made  by  me  pursuant  to  said 
order  of  appraisement. 

Respectfully  submitted  this day  of , 

A.  D.  19 


Appraiser. 
(Must  be  sworn  to  before  Clerk  or  Notary.) 


State  of  Illinois, 
Cook  County. 


403 

[ss. 


being  duly  sworn, 

says  that  the  foregoing  report  by  him  subscribed  is  a  true  and  correct 
report  of  the  appraisement  made  by  him  in  the  matter  of  said  estate, 
and  that  he  has  faithfully  and  fairly  performed  the  duties  of  such 
appraiser,  according  to  the  best  of  his  understanding. 

Subscribed  and  sworn  to  before  me  this  day  of 

,  A.  D.  19 

Notary  Pul)Uc  in  and  for  Cook  County,  Illinois. 
567. 

State  of  Illinois,! 
County  of  Cook,    y^' 
Before  the  Hon ,  County  Judge  of  Cook  County. 

County  Judge's  Order  of  Tax. 

In  the  Matter  of  the  Estate    ) 

of  f  ORDER. 
,  Deceased.   ' 

It  appearing  from  the  report  of , 

the  Appraiser  heretofore  duly  appointed  to  conduct  an  appraisement  of 
all  property  appraisable  by  reason  of  the  death  of  said  decedent,  under 
and  pursuant  to  the  statutes  of  this  State  relating  to  the  taxation  of 
gifts,  legacies,  inheritances,  transfers,  appointments  and  interests,  this 

day  presented  and  read :  that  said  decedent  died  on  the 

day  of ,  and  that  due  notice  of  the  time  and  place 

of  said  appraisement  was  duly  given  to  all  parties  in  interest  in  said 
appraisement;  and  it  further  appearing  that  the  said  Appraiser  has 
appraised,  at  its  fair  market  value,  all  property  exhibited  or  made 
known  to  the  Appraiser. 

It  is,  therefobe,  ordered,  That  the  said  report  of  appraisement, 
together  with  the  recommendations  for  taxation  and  exemption  made 
by  said  Appraiser,  be  and  the  same  is  hereby  approved,  and  that  the 
said  report,  together  with  the  depositions  of  witnesses,  exhibits,  doc- 
umentary evidence,  statements  and  findings  of  said  Appraiser,  be 
forthwith  filed  in  the  office  of  the  Clerk  of  the  County  Court  of  Cook 
County,  and 

It  is  further  ordered,  Upon  said  report  that  the  cash  value  of  the 
several  successions,  estates,  annuities,  gifts,  transfers,  appointments. 
Interests,  etc.,  subject  to  taxation  or  exemption  by  reason  of  the  death 
of  said  decedent  under  the  laws  of  this  State  and  the  tax  to  which  the 
same  are  severally  liable,  be  and  the  same  are  hereby  assessed  and 
fixed  as  follows: 
568.  Order  of  Tax— Gont. 

Estates,  Beneficiaries,       Appraised  Taxable 

Relationship  and  Fair  Market    Statutory        Cash  Tax 

Description  of  Property.        Value.      Exemption.    Value.    Rate.    Fixed. 


404 

569.  Order  of  Tax—Gont. 

It  is  fubther  ordered,  That  the  appraisement  returned  by  the  Ap- 
praiser in  his  said  report,  together  with  the  cash  value  of  the  several 
successions,  estates,  annuities,  gifts,  transfers,  appointments,  interests, 
etc.,  subject  to  taxation  or  exemption  by  reason  of  the  death  of  said 
decedent,  and  the  tax  thereon  as  assessed  and  fixed  herein  be  entered 
in  the  public  inheritance  tax  records  of  this  county. 


County  Judge. 
570.  County  Judge's  Notice  of  Tax. 

[8,1 

fss. 


State  of  Illinois 
County  of  Cook 


Before  the  County  Judge. 


In  the  Matter  of  the  Estate   ^ 

of  [•  No 

,  Deceased.   ) 

You  are  hereby  notified  that  I  have,  by  order,  made  the 

day  of  ,  19 ,  assessed  and  fixed  the  cash  value  of 

such  successions,  interests,  estates,  legacies,  transfers,  gifts  and  prop- 
erty as  you  and  each  of  you  are  entitled  to  receive  by  reason  of  the 
death  of  said  decedent  and  the  amount  of  tax  to  which  the  same  is 
liable,  pursuant  to  order  of  tax  entered  herein  under  an  act  to  tax 
gifts,  legacies,  inheritances,  transfers  and  interests  in  certain  cases, 
and  to  provide  for  the  collection  of  the  same,  approved  June  14,  1909, 
in  force  July  1,  1909,  as  follows,  viz.: 

Beneficiary.  Cash  Value.  Tax. 


You  will  please  take  notice  that  interest  is  also  charged  on  this 
tax  from  date  of  death  of  decedent. 


County  Judge. 
To 


405 

571.     County  Judge's  Certificate  of  Mailing  Notice 
to  Persons  Taxed. 


State  of  Illinois, 
County  of  Cook 


is,l 
^ss. 

\  No. 


In  the  Matteb  of  the  Estate 

f  Certificate  of  Mailing 

)  Notice  of  Tax  Fixed. 

I,  Judge  of  the  County  of  Cook, 

in  the  State  of  Illinois,  do  hereby  certify  that  on  the day 

of ,  A.  D.  191. . . .,  I  sent  by  mail  a  notice,  a  copy  of 

which  is  hereto  attached,  to  the  following  persons,  being  all  the 
parties  known  to  be  interested  in  all  estates,  annuities  and  life  estates, 
or  terms  of  years  growing  out  of  said  estate,  and  addressed  as  follows: 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 

One  copy  to 


County  Judge. 

572.     Inheritance  Law  of  1895  as  Amended  1901. 

Tax  on  Gifts,  Legacies  and  Inheritances. 

1.  Be  it  enacted  by  the  People  of  the  State  of  Illinois, 
represented  in  the  General  Assembly,  All  property  real, 
personal  and  mixed,  which  shall  pass  by  will  or  by  the 
intestate  laws  of  this  State  from  any  person  who  may 
die  seized  or  possessed  of  the  same  while  a  resident  of 
this  State,  or,  if  decedent  was  not  a  resident  of  this 
State  at  the  time  of  his  death,  which  property  or  any 
part  thereof  shall  be  within  this  State  or  any  interest 
therein  or  income  therefrom,  which  shall  be  transferred 
by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the 


406 

death  of  the  grantor  or  bargainor  or  intended  to  take 
effect,  in  possession  or  enjoyment  after  such  death,  to 
any  person  or  persons  or  to  any  body  politic  or  corporate 
in  trust  or  otherwise,  or  by  reason  whereof  any  person 
or  body  politic  or  corporate  shall  become  beneficially  en- 
titled in  possession  or  expectation  to  any  property  or  in- 
come thereof,  shall  be  and  is  subject  to  a  tax  at  the  rate 
hereinafter  specified  to  be  paid  to  the  treasurer  of  the 
proper  county,  for  the  use  of  the  State;  and  all  heirs, 
legatees  and  devisees,  administrators,  executors  and  trus- 
tees shall  be  liable  for  any  and  all  such  taxes  until  the 
same  shall  have  been  paid  as  hereinafter  directed.  When 
the  beneficial  interests  to  any  property  or  income  there- 
from shall  pass  to  or  for  the  use  of  any  father,  mother, 
husband,  wife,  child,  brother,  sister,  wife  or  widow  of  the 
son  or  the  husband  of  the  daughter  or  any  child  or  chil- 
dren adopted  as  such  in  conformity  with  the  laws  of  the 
State  of  Illinois  or  to  any  person  to  whom  the  deceased, 
for  not  less  than  ten  years  prior  to  death,  stood  in  the 
acknowledged  relation  of  a  parent,  or  to  any  lineal  de- 
scendant born  in  lawful  wedlock;  in  every  such  case  the 
rate  of  tax  shall  be  one  dollar  on  every  hundred  dollars 
of  the  clear  market  value  of  such  property  received  by 
each  person  and  at  and  after  the  same  rate  for  every 
less  amount,  provided  that  any  estate  which  may  be  val- 
ued at  a  less  sum  than  twenty  thousand  dollars  shall 
not  be  subject  to  any  such  duty  or  taxes;  and  the  tax 
is  to  be  levied  in  above  cases  only  upon  the  excess  of 
twenty  thousand  dollars  received  by  each  person.  When 
the  beneficial  interests  to  any  property  or  income  there- 
from shall  pass  to  or  for  the  use  of  any  uncle,  aunt,  niece, 
nephew  or  any  lineal  descendant  of  the  same,  in  every 
such  case  the  rate  of  such  tax  shall  be  two  dollars 
on  every    one    hundred    dollars    of    the    clear    mar- 


407 

ket  value  of  sucli  property  received  by  each  per- 
son on  the  excess  of  two  thousand  dollars  so  received  by 
each  person.  In  all  other  cases  the  rate  shall  be  as  fol- 
lows: On  each  and  every  hundred  dollars  of  the  clear 
market  value  of  all  property  and  at  the  same  rate  for  any 
less  amount;  on  all  estates  of  ten  thousand  dollars  and 
less,  three  dollars;  on  all  estates  of  over  ten  thousand 
dollars  and  not  exceeding  twenty  thousand  dollars,  four 
dollars,  on  all  estates  over  twenty  thousand  dollars  and 
not  exceeding  fifty  thousand  dollars,  five  dollars;  and 
on  all  estates  over  fifty  thousand  dollars,  six  dollars: 
Provided  That  an  estate  in  the  above  case  which  may  be 
valued  at  a  less  sum  than  five  hundred  dollars  shall  not 
be  subject  to  any  duty  or  tax. 

2.  When  any  person  shall  bequeath  or  devise  any 
property  or  interest  therein  or  income  therefrom  to 
mother,  father,  husband,  wife,  brother  and  sister,  the 
widow  of  the  son  or  a  lineal  descendant  during  the  life 
or  for  a  term  of  years  or  remainder  to  the  collateral  heir 
of  the  decedent,  or  to  the  stranger  in  blood  or  to  the 
body  politic  or  corporate  at  their  decease,  or  on  the  ex- 
piration of  such  term,  the  said  life  estate  or  estates  for  a 
term  of  years  shall  not  be  subject  to  any  tax  and  the 
property  so  passing  shall  be  appraised  immediately  after 
the  death  at  what  was  the  fair  market  value  thereof  at 
the  time  of  the  death  of  the  decedent  in  the  manner  here- 
inafter provided,  and  after  deducting  therefrom  the  value 
of  said  life  estate,  or  term  of  years,  the  tax  transcribed 
by  this  act  on  the  remainder  shall  be  immediately  due 
and  payable  to  the  treasurer  of  the  proper  county,  and, 
together  with  the  interests  thereon,  shall  be  and  remain 
a  lien  on  said  property  until  the  same  is  paid :  Provided, 
that  the  person  or  persons  or  body  politic  or  corporate 


408 

beneficially  interested  in  the  property  chargeable  with 
said  tax  elect  not  to  pay  the  same  until  they  shall  come 
in  the  actual  possession  or  enjoyment  of  such  property, 
or,  in  that  case  said  person  or  persons  or  body  politic 
or  corporate  shall  give  a  bond  to  the  People  of  the  State 
of  Illinois  in  the  penalty  three  times  the  amount  of  the 
tax  arising  upon  such  estate  with  such  sureties  as  the 
County  Judge  may  approve,  conditioned  for  the  pay- 
ment of  the  said  tax  and  interest  thereon  at  such  time 
or  period  as  they  or  their  representatives  may  come  into 
the  actual  possession  or  enjoyment  of  said  property; 
which  bond  shall  be  filed  in  the  office  of  the  County  Clerk 
of  the  proper  county:  Provided  further,  that  such  per- 
son shall  make  a  full,  verified  return  of  said  property  to 
said  County  Judge,  and  file  the  same  in  his  office  within 
one  year  from  the  death  of  the  decedent,  and  within  that 
period  enter  into  such  securities  and  renew  the  same  for 
^Ye  years. 

2|.  When  the  beneficial  interests  of  any  property  or 
income  therefrom  shall  pass  to  or  for  the  use  of  any  hos- 
pital, religious,  educational,  bible,  missionary,  tract,  sci- 
entific, benevolent  or  charitable  purpose,  or  to  any  trus- 
tee, bishop  or  minister  of  any  church  or  religious  denomi- 
nation, held  and  used  exclusively  for  the  religious,  edu- 
cational or  charitable  uses  and  purposes  of  such  church 
or  religious  denomination,  institution  or  corporation,  by 
grant,  gift,  bequest  or  otherwise,  the  same  shall  not  be 
subject  to  any  such  duty  or  tax,  but  this  provision  shall 
not  apply  to  any  corporation  which  has  the  right  to  make 
dividends  or  distribute  profits  or  assets  among  its  mem- 
bers.    (By  Amendment  1901.) 

3.  All  taxes  imposed  by  this  act,  unless  otherwise 
herein  provided  for,  shall  be  due  and  payable  at  the  death 


409 

of  the  decedent  and  interest  at  the  rate  of  six  per  cent, 
per  annum  shall  be  charged  and  collected  thereon  for 
such  time  as  said  taxes  is  not  paid:  Provided,  that  if 
said  tax  is  paid  within  six  months  from  the  accruing 
thereof,  interest  shall  not  be  charged  or  collected  there- 
on, but  a  discount  of  five  per  cent,  shall  be  allowed  and 
deducted  from  said  tax,  and  in  all  cases  where  the  ex- 
ecutors, administrators,  or  trustees  do  not  pay  such  tax 
within  one  year  from  the  death  of  the  decedent,  they 
shall  be  required  to  give  a  bond  in  the  form  and  to  the 
effect  prescribed  in  Section  2  of  this  act  for  the  payment 
of  said  tax,  together  with  interest. 

4.  Any  administrator,  executor  or  trustee  having  any 
charge  or  trust  in  legacies  or  property  for  distribution 
subject  to  the  said  tax  shall  deduct  the  tax  therefrom,  or 
if  the  legacy  or  property  be  not  money  he  shall  collect 
a  tax  thereon  upon  the  appraised  value  thereof  from  the 
legatee  or  person  entitled  to  such  property,  and  he  shall 
not  deliver  or  be  compelled  to  deliver  any  specific  legacy 
or  property  subject  to  tax  to  any  person  until  he  shall 
have  collected  the  tax  thereon;  and  whenever  any  such 
legacy  shall  be  charged  upon  or  payable  out  of  real 
estate  the  heir  or  devisee  before  paying  the  same  shall 
deduct  said  tax  therefrom,  and  pay  the  same  to  the  ex- 
ecutor, administrator  or  trustee^  and  the  same  shall  re- 
main a  charge  on  such  real  estate  until  paid,  and  the  pay- 
ment thereof  shall  be  enforced  by  the  excutor,  adminis- 
trator or  trustee  in  the  same  manner  that  the  said  pay- 
ment of  said  legacies  might  be  enforced,  if,  however,  such 
legacy  be  given  in  money  to  any  person  for  a  limited 
period,  he  shall  retain  the  tax  upon  the  whole  amount, 
but  if  it  be  not  in  money  he  shall  make  application  to  the 
court  having  jurisdiction  of  his  accounts,  to  make  an  ap- 


410 

portionment  if  the  case  requires  it  of  the  sum  to  be  paid 
into  his  hands  by  such  legatees,  and  for  such  further 
order  relative  thereof  as  the  case  may  require. 

5.  All  executors,  administrators  and  trustees  shall 
have  full  power  to  sell  so  much  of  the  property  of  the 
decedent  as  will  enable  them  to  pay  said  tax,  in  the  same 
manner  as  they  may  be  enabled  to  do  by  law  for  the  pay- 
ment of  duties  of  their  testators  and  intestates,  and  the 
amount  of  said  tax  shall  be  paid  as  hereinafter  directed. 

6.  Every  sum  of  money  retained  by  any  executor,  ad- 
ministrator or  trustee,  or  paid  into  his  hands  for  any 
tax  on  any  property,  shall  be  paid  by  him  within  thirty 
days  thereafter  to  the  treasurer  of  the  proper  county, 
and  the  said  treasurer  or  treasurers  shall  give,  and  every 
executor,  administrator  or  trustee  shall  take,  duplicate 
receipts  from  him  of  said  payments,  one  of  which  re- 
ceipts he  shall  immediately  send  to  the  State  Treasurer, 
whose  duty  it  shall  be  to  charge  the  treasurer  so  receiv- 
ing the  tax  with  the  amount  thereof,  and  shall  seal  said 
receipt  with  the  seal  of  his  office  and  countersign  the 
same  and  return  it  to  the  executor,  administrator  or 
trustee,  whereupon  it  shall  be  a  proper  voucher  in  the 
settlement  of  his  accounts;  but  the  executor,  adminis- 
trator or  trustee  shall  not  be  entitled  to  credit  in  his  ac- 
counts or  be  discharged  from  liability  for  such  tax  un- 
less he  shall  purchase  a  receipt  so  sealed  and  counter- 
signed by  the  treasurer  and  a  copy  thereof  certified  by 
him. 

7.  Whenever  any  of  the  real  estate  of  which  any  deced- 
ent may  die  seized  shall  pass  to  any  body  politic  or  cor- 
porate, or  to  any  person  or  persons,  or  in  trust  for  them, 
or  some  of  them,  it  shall  be  the  duty  of  the  executor,  ad- 
ministrator or  trustee  of  such  decedent  to  give  informa- 
tion thereof  in  writing  to  the  treasurer  of  the  county 


411 

where  said  real  estate  is  situated,  within  six  months  after 
they  undertake  the  execution  of  their  expected  duties,  or 
if  the  fact  be  not  known  to  them  within  that  period,  then 
within  one  month  after  the  same  shall  have  come  to  their 
knowledge. 

8.  Whenever  debts  shall  be  proved  against  the  estate 
of  the  decedent  after  distribution  of  legacies  from  which 
the  inheritant  (inheritance)  tax  has  been  deducted  in 
compliance  with  this  act,  and  the  legatee  is  required  to 
refund  any  portion  of  the  legacy,  a  proportion  of  the  said 
tax  shall  be  repaid  to  him  by  the  executor  or  adminis- 
trator if  the  said  tax  has  not  been  paid  into  the  state 
or  county  treasury,  or  by  the  county  treasurer  if  it  has 
been  so  paid. 

9.  Whenever  any  foreign  executor  or  administrator 
shall  assign  or  transfer  any  stocks  or  loans  in  this  State 
standing  in  the  name  of  decedent  or  in  trust  for  a  de- 
cedent, which  shall  be  liable  to  the  said  tax,  such  tax 
shall  be  paid  to  the  treasury  or  treasurer  of  the  proper 
county  on  the  transfer  thereof,  otherwise  the  corpora- 
tion forming  such  transfer  shall  become  liable  to  pay 
such  taxes,  provided  that  such  corporation  has  knowl- 
edge before  such  transfer  that  said  stocks  or  loans  are 
liable  to  such  taxes. 

10.  When  any  amount  of  said  tax  shall  have  been  paid 
erroneously  to  the  State  treasury,  it  shall  be  lawful  for 
him  on  satisfactory  proof  rendered  to  him  by  said  county 
treasurer  of  said  erroneous  payments  to  refund  and 
pay  to  the  executor,  administrator  or  trustee  person  or 
persons  who  have  paid  any  such  tax  in  error  the  amount 
of  such  tax  so  paid,  provided  that  all  applications  for  the 
repayment  of  said  tax  shall  be  made  within  two  years 
from  the  date  of  said  payment. 

11.  In  order  to  fix  the  value  of  property  of  persons 


412 

whose  estate  shall  be  subject  to  the  payment  of  said  tax, 
the  County  Judge,  on  application  of  any  interested  party, 
or  upon  his  own  motion,  shall  appoint  some  competent 
person  as  appraiser  as  often  as  or  whenever  occasion 
may  require,  whose  duty  it  shall  be  forthwith  to  give 
such  notice  by  mail,  to  all  persons  known  to  have  or  claim 
an  interest  in  such  property,  and  to  such  persons  as  the 
County  Judge  may,  by  order  direct,  of  the  time  and  place 
he  will  appraise  such  property,  and  at  such  time  and 
place  to  appraise  the  same  at  a  fair  market  value,  and  for 
that  purpose  the  appraiser  is  authorized,  by  leave  of  the 
County  Judge,  to  use  subpoenas  for  and  to  compel  the 
attendance  of  witnesses  before  him,  and  to  take  the  evi- 
dence of  such  witnesses  under  oath  concerning  such  prop- 
erty and  the  value  thereof,  and  he  shall  make  a  report 
thereof  and  of  such  value  in  writing,  to  said  County 
Judge,  with  the  depositions  of  the  witnesses  examined 
and  such  other  facts  in  relation  thereto  and  to  said  mat- 
ters as  said  County  Judge  may,  by  order,  require  to  be 
filed  in  the  office  of  the  clerk  of  said  county  court,  and 
from  this  report  the  said  County  Judge  shall  forthwith 
assess  and  ^  the  then  cash  value  of  all  estates,  annuities 
and  life  estates  or  terms  of  years  growing  out  of  said 
estate,  and  the  tax  to  which  the  same  is  liable,  and  shall 
immediately  give  notice  by  mail  to  all  parties  known  to 
be  interested  therein.  Any  person  or  persons  dissatisfied 
with  the  appraisement  or  assessment  may  appeal  there- 
from to  the  County  Court  of  the  proper  county  within 
sixty  days  after  the  making  and  filing  of  such  appraise- 
ment or  assessment  on  paying  or  giving  security  satis- 
factory to  the  County  Judge  to  pay  all  costs,  together 
with  whatever  taxes  shall  be  fixed  by  said  court.  The 
said  Appraiser  shall  be  paid  by  the  county  treasurer  out 
of  any  funds  he  may  have  in  his  hands  on  account  of  the 


413 

inheritance  tax,  as  by  law  provided  on  the  certificate  of 
the  County  Judge,  such  compensation  as  such  judge  may 
deem  just  for  said  appraiser's  services  as  such  appraiser, 
not  to  exceed  ten  dollars  per  day  for  each  day  actually 
and  necessarily  employed  in  said  appraisement,  together 
with  his  actual  and  necessary  traveling  expenses  and  dis- 
bursements, including  such  witness   fees  paid  by  him. 

11|^.  The  fees  of  the  clerk  of  the  comity  court  in  in- 
heritance tax  matters  in  the  respective  counties  of  this 
state,  as  classified  in  the  act  concerning  fees  and  salaries, 
shall  be  as  follows : 

In  counties  of  the  first  and  second  class,  for  services  in 
all  proceedings  in  each  estate  before  the  county  judge, 
the  clerk  shall  receive  a  fee  of  five  dollars.  In  all  such 
proceedings  in  counties  of  the  third  class,  the  clerk  shall 
receive  a  fee  of  ten  dollars.  Such  fees  shall  be  paid  by  the 
county  treasurer,  on  the  certificate  of  the  county  judge, 
out  of  any  money  in  his  hands,  on  account  of  said  tax. 
In  counties  of  the  third  class,  the  Attorney  General  of 
(the)  State  may  appoint  an  attorney,  who  shall  be  known 
as  the  ^inheritance  tax  attorney'',  and  whose  salary  shall 
be  not  to  exceed  three  thousand  dollars  per  year,  paya- 
ble monthly  out  of  the  state  treasury  upon  warrants 
drawn  by  the  auditor  of  public  accounts,  on  vouchers  ap- 
proved by  the  Attorney  General.  In  Counties  of  the 
third  class,  the  clerk  of  the  county  court  may  appoint  a 
clerk  in  the  office  of  the  clerk  of  said  court,  to  be  known 
as  the  *  inheritance  tax  clerk",  whose  compensation  shall 
be  fixed  by  the  County  Judge,  not  to  exceed  fifteen  hun- 
dred dollars  per  year,  and  not  to  exceed  the  fee  earned 
in  said  office  in  inheritance  tax  matters,  the  surplus  of 
such  fees  over  said  compensation  so  fixed  to  be  turned 


414 

into  the  county  treasury.  In  addition  to  the  above,  the 
clerk  of  the  county  court  shall  be  entitled,  in  all  suits 
brought  for  the  collection  of  delinquent  inheritance  tax, 
and  all  contested  inheritance  tax  cases  appealed  from 
the  county  judge  to  the  county  court,  and  in  all  appeals 
from  the  county  court  to  the  supreme  court,  the  same 
fees  as  are  now,  or  which  may  hereafter  be,  allowed  by 
law  in  suits  at  law,  or  in  the  matter  of  appeals  at  law, 
to  or  from  the  county  court,  which  fees  shall  be  taxed 
as  costs  and  paid  as  in  other  cases  at  law;  and  in  all 
cases  arising  under  this  act,  including  certified  copies  of 
documents  or  records  in  his  office,  for  which  no  specific 
fees  are  provided,  the  clerk  of  the  county  court  shall 
charge  against  and  collect,  from  the  person  applying  for, 
or  entitled  to  such  services,  or  certified  copies,  the  same 
fees  as  are  now,  or  which  may  hereafter  be,  allowed  for 
similar  services  or  certified  copies  in  other  cases  in  said 
court,  and  for  recording  inheritance  tax  receipts  required 
to  be  recorded  in  his  office,  he  shall  receive  the  same  fees 
which  now  are,  or  hereafter  may  be  allowed  by  law  to  the 
recorder  of  deeds  for  recording  similar  instruments. 
(By  Amendment  1901.) 

12.  Any  Appraiser  appointed  by  this  act  who  shall 
take  any  fee  or  reward  from  any  executor,  administrator, 
trustee,  legatee,  next  of  kin  or  heir  of  any  decedent,  or 
from  any  other  person  liable  to  pay  said  tax  or  any  por- 
tion thereof,  shall  be  guilty  of  a  misdemeanor,  and  upon 
conviction  in  any  court  having  jurisdiction  of  misde- 
meanors he  shall  be  fined  not  less  than  two  hundred  and 
fifty  dollars  nor  more  than  ^ve  hundred  dollars  and  im- 
prisoned not  exceeding  ninety  days;  and  in  addition 
thereto  the  County  Judge  shall  dismiss  him  from  such 
service. 


415 

13.  The  County  Court  in  the  county  in  which  the  real 
property  is  situated  of  the  decedent  who  was  not  a  resi- 
dent of  the  State  or  in  the  county  of  which  the  deceased 
was  a  resident  at  the  time  of  his  death,  shall  have  juris- 
diction to  hear  and  determine  all  questions  in  relation 
to  the  tax  arising  under  the  provisions  of  this  act,  and 
the  county  court  first  acquiring  jurisdiction  hereunder 
shall  retain  the  same  to  the  exclusion  of  every  other. 

14.  If  it  shall  appear  to  the  county  court  that  any  tax 
accruing  under  this  act  has  not  been  paid  according  to 
law,  it  shall  issue  a  summons  summoning  the  persons  in- 
terested in  the  property  liable  to  the  tax  to  appear  before 
the  court  on  a  day  certain  not  more  than  three  months 
after  the  date  of  such  summons,  to  show  cause  why  said 
tax  should  not  be  paid.  The  process  practice  and  plead- 
ings, and  the  hearing  and  determination  thereof,  and  the 
judgment  in  said  court  in  such  cases  shall  be  the  same 
as  those  now  provided  or  which  may  hereafter  be  pro- 
vided in  probate  cases  in  the  county  courts  in  this  State 
and  the  fees  and  costs  in  such  cases  shall  be  the  same  as 
in  probate  cases  in  the  county  courts  of  this  state. 

15.  Whenever  the  treasurer  of  any  county  shall  have 
reason  to  believe  that  any  tax  is  due  and  unpaid  under 
this  act,  after  the  refusal  or  neglect  of  the  person  inter- 
ested in  the  property  liable  to  pay  said  tax  to  pay  the 
same,  he  shall  notify  the  state's  attorney  of  the  proper 
county,  in  writing,  of  such  refusal  to  pay  said  tax  and 
the  state 's  attorney  so  notified,  if  he  has  proper  cause  to 
believe  a  tax  is  due  and  unpaid  shall  prosecute  the  pro- 
ceeding in  the  county  court  in  the  proper  county  as  pro- 
vided in  Section  14  of  this  Act  for  the  enforcement  and 
collection  of  such  tax,  and  in  such  case  said  court  shall 
allow  as  costs  in  the  said  case  such  fees  to  said  attorney 
as  he  may  deem  reasonable. 


416 

16.  The  County  Judge  and  county  clerk  of  each  county 
shall,  every  three  months,  make  a  statement  in  writing 
to  the  county  treasurer  of  the  county  of  the  property 
from  which  or  the  party  from  whom  he  has  reason  to  be- 
lieve a  tax  under  this  act  is  due  and  unpaid. 

17.  Whenever  the  County  Judge  of  any  county  shall 
certify  that  there  was  probable  cause  for  issuing  a  sum- 
mons and  taking  the  proceedings  specified  in  section 
fourteen  of  this  act  the  State  Treasurer  shall  pay  or  al- 
low to  the  treasury  of  any  county  all  expenses  incurred 
for  service  of  summons  and  his  other  lawful  disburse- 
ments that  has  not  otherwise  been  paid. 

18.  The  Treasurer  of  the  State  shall  furnish  to  each 
county  judge  a  book  in  which  he  shall  enter  the  returns 
made  by  appraisers,  the  cash  value  of  annuities,  life  es- 
tates and  terms  of  years  and  other  property  fixed  by 
him,  and  the  tax  assessed  thereon  and  the  amounts  of 
any  receipts  for  payments  thereof  filed  with  him,  which 
books  shall  be  kept  in  the  ofiice  of  the  county  judge  as  a 
public  record. 

19.  The  Treasurer  of  each  county  shall  collect  and 
pay  the  State  Treasurer  all  taxes  that  may  be  due  and 
payable  under  this  act,  who  shall  give  him  a  receipt 
therefor,  of  which  collection  and  payment  he  shall  make 
a  report  under  oath  to  the  Auditor  of  Public  Accounts  on 
the  first  Monday  in  March  and  September  of  each  year, 
stating  for  what  estate  paid  and  in  such  form  and  con- 
taining such  particulars  as  the  Auditor  may  prescribe; 
and  for  all  such  taxes  collected  by  him  and  not  paid  to 
the  State  Treasurer  by  the  first  day  of  October  and 
April  of  each  year,  he  shall  pay  interest  at  the  rate  of 
ten  per  cent  per  annum. 

20.  The  treasurer  of  each  county  shall  be  allowed  to 
retain  two  per  cent  on  all  taxes  paid  and  accounted  for 


417 

by  him  under  this  act  in  full  for  his  services  in  collecting 
and  paying  the  same  in  addition  to  his  salary  or  fees 
now  allowed  by  law. 

21.  Any  person  or  body  politic  or  corporate  shall, 
upon  the  payment  of  the  sum  of  fifty  cents,  be  entitled  to 
a  receipt  from  the  county  treasurer  of  any  county  or  the 
copy  of  the  receipt  at  his  option  that  may  have  been 
given  by  said  treasurer  for  the  payment  of  any  tax  under 
this  act  to  be  sealed  with  the  seal  of  his  office,  which  re- 
ceipt shall  designate  on  what  real  property,  if  any,  of 
which  any  deceased  may  have  died  seized,  said  tax  has 
been  paid  and  by  whom  paid,  and  whether  or  not  it  is  in 
full  of  said  tax  and  said  receipt  may  be  recorded  in  the 
clerk's  office  of  said  county  in  which  the  property  may 
be  situated  in  the  book  to  be  kept  by  said  clerk  for  such 
purpose. 

21^.  When  any  person  interested  in  any  property  in 
this  state,  which  shall  pass  by  will  or  the  intestate  laws 
of  this  state,  shall  deem  the  same  not  subject  to  any  tax 
under  this  act,  he  may  file  his  petition  in  the  county  court 
of  the  proper  county  to  determine  whether  said  property 
is  subject  to  the  tax  herein  provided,  in  which  petition 
the  county  treasurer  and  all  persons  known  to  have  or 
claim  any  interest  in  said  property  shall  be  made  par- 
ties. The  County  Court  may  hear  the  said  cause  upon 
the  relation  of  the  parties  and  the  testimony  of  wit- 
nesses, and  evidence  produced  in  open  court,  and,  if  the 
court  shall  find  said  property  is  not  subject  to  any  tax, 
as  herein  provided,  the  court  shall,  by  order,  so  deter- 
naine;  but  if  it  shall  appear  that  said  property,  or  any 
part  thereof,  is  subject  to  any  such  tax,  the  same  shall 
be  appraised  and  taxed  as  in  other  cases.  An  adjudi- 
cation by  the  county  court,  as  herein  provided,  shall  be 
vconclusive  as  to  the  lien  of  the  tax  herein  provided  upon 


418 

said  property,  subject  to  appeal  to  the  supreme  court  of 
the  state  by  the  county  treasurer,  or  Attorney  General 
of  the  State,  in  behalf  of  the  people,  or  by  any  party 
having  an  interest  in  said  property.  The  fees  and  costs 
in  all  cases  arising  under  this  section  shall  be  the  same 
as  are  now,  or  may  hereafter  be,  allowed  by  law  in  cases 
at  law  in  the  county  court.     (By  Amendment  1901.) 

22.  The  lien  of  the  collateral  inheritance  tax  shall  con- 
tinue until  the  said  tax  is  settled  and  satisfied :  Provided, 
that  said  lien  shall  be  limited  to  the  property  chargeable 
therewith:  and,  provided  further,  that  all  inheritance 
taxes  shall  be  sued  for  within  ^ve  years  after  they  are 
due  and  legally  demandable,  otherwise  they  shall  be  pre- 
sumed to  be  paid  and  cease  to  be  a  lien  as  against  any 
purchasers  of  real  estate. 

23.  All  laws  or  parts  of  laws  inconsistent  herewith 
be  and  the  same  are  hereby  repealed. 

573. 

^^In  the  Couet  or  Claims  of  the  State  of  Illinois. 
October  Term,  A.  D.  1910. 

Jennie  Sanfoed  Geiffith,  Executrix  of 
the  Estate  of  Merritt  E.  Sanford,  Deceased, 
vs. 
State  of  Illinois. 

The  evidence  in  this  cause  shows  that  Merritt  E.  San- 
ford, a  resident  of  Eome,  New  York,  died  in  Chicago- 
October  29,  1906.  His  will  was  admitted  to  probate  in 
Cook  County  on  the  petition  of  his  sister,  Jennie  San- 
ford Griffith,  to  whom  letters  testamentary  were  issued 
as  executrix,  November  27th,  1906.  Sanford  died  seized 
of  real  estate  in  Chicago  valued  at  $20,000.    He  was  also* 


419 

found  to  be  the  possessor  of  certain  securities,  which 
were  found  in  a  safe  deposit  vault  in  Chicago,  where 
they  had  been  deposited  by  decedent  for  safekeeping. 
These  securities  and  their  appraised  values  were  as  fol- 
lows :  Certificates  of  stock  of  Illinois  corporations,  $21,- 
575;  certificates  of  foreign  corporations,  $24,962.50; 
bonds  issued  by  Illinois  corporations,  $19,484.58;  bonds 
issued  by  foreign  corporations,  $38,910;  and  bonds  of  a 
railroad  company  organized  under  the  law  of  Illinois  and 
Iowa,  of  the  value  of  $9,100.  He  also  left  cash  on  de- 
posit with  certain  Chicago  banks,  to  the  amount  of  $1,- 
194.76,  and  other  personal  effects  and  chattels  in  Cook 
County  valued  at  $1,523.  The  Inheritance  Tax  Appraiser 
appointed  by  the  County  Court  of  Cook  County  includ- 
ed in  his  appraisement  of  property  all  the  property  above 
mentioned.  The  County  Judge  of  Cook  County,  upon 
such  report  and  appraisement,  assessed  and  fixed  the  In- 
heritance taxes,  to  be  paid  by  the  beneficiaries  under  the 
will,  at  $1,423.25,  and  on  April  26,  1907,  the  executrix 
paid  to  the  County  Treasurer  of  Cook  County  the  sum 
of  $1,352.09,  being  the  taxes  so  fixed,  less  five  per  cent, 
deducted,  in  accordance  with  the  statute,  on  account  of 
payment  within  six  months  after  testator's  death.  Pay- 
ment of  this  amount  was  made  by  check  and  upon  the 
check  the  words  '^paid  under  protest  were  endorsed 
by  the  attorneys  of  the  executrix.  Subsequently  the 
money  so  paid  was  turned  over  to  the  State  treasury  by 
the  County  Treasurer  of  Cook  County. 

From  the  Order  of  the  County  Judge  fixing  the  taxes, 
an  appeal  was  prayed  by  the  executrix  to  the  County 
Court  of  Cook  County,  where,  after  a  hearing  on  May 
17,  1909,  the  stocks  and  bonds  of  foreign  corporations 
were  held  by  that  Court  not  subject  to  an  Inheritance 
Tax  under  the  laws  of  this  State. 


420 

The  same  Court  found  that  the  taxes,  on  the  remainder 
of  the  property  included  in  the  Appraiser's  report  should 
be  $900,  and  ordered  that  the  County  Treasurer  refund 
to  the  executrix  the  sum  of  $497.09,  being  the  difference 
between  the  amount  previously  fixed  by  the  County 
Judge  and  the  amount  as  finally  fixed  by  the  County 
Court,  less  the  discount  in  both  cases.  From  this  judg- 
ment of  the  County  Court  of  Cook  County  an  appeal 
was  taken  by  the  People  to  the  Supreme  Court  of  Illi- 
nois, which  said  Court,  on  June  29,  1910,  affirmed  the 
judgment  of  the  County  Court  as  to  the  amount  of  In- 
heritance Tax  to  be  paid  by  the  beneficiaries  in  this  es- 
tate, but  reversed  that  part  of  the  judgment  ordering  the 
repayment  by  the  County  Treasurer  of  the  said  $497.09. 

The  construction  of  Section  10  of  the  Inheritance  Tax 
Act  was  involved  in  this  case.  This  section  provides 
that  when  any  amount  of  the  inheritance  tax  ^  shall  have 
been  paid  erroneously  to  the  State  Treasurer,  it  shall  be 
lawful  for  him,  on  satisfactory  proof  rendered  to  him 
by  said  County  Treasurer  of  said  erroneous  payments, 
to  refund  and  pay  to  the  executor,  administrator  or  trus- 
tee, person  or  persons,  who  have  paid  any  such  tax  in 
error,  the  amount  of  such  tax  so  paid,  provided  that  all 
applications  for  repayment  of  said  tax  shall  be  made 
within  two  years  from  the  date  of  said  payment.'  In 
reference  to  this  section,  the  Supreme  Court  held  that 
it  was  not  the  intention  of  this  section  to  authorize  the 
County  Treasurer  to  repay  taxes  erroneously  paid  to 
him  but  that  the  State  Treasurer,  upon  proper  proof, 
was  to  refund  such  amounts.  To  secure  such  a  refund 
of  the  said  $497.09,  now  covered  into  the  State  Treasury, 
is  the  object  of  the  claimant  in  filing  her  claim  in  this 
Court. 


421 

It  is  a  well  established  principle  of  law  in  Illinois  that 
there  can  be  no  recovery  back  of  taxes  erroneously  or 
illegally  paid,  unless  the  same  were  paid  under  actual 
duress  or  compulsion.  Yates  v.  Insurance  Co.,  200  111. 
202,  and  cases  cited. 

Upon  the  check  by  which  payment  of  the  taxes  in  ques- 
tion was  made,  the  endorsement  of  the  words  *^paid  un- 
der protest, ' '  obviously  did  not  amount  to  payment  under 
duress  or  compulsion.  Therefore,  if  recovery  can  be  had 
in  this  cause,  it  must  be  had  under  Section  10,  above  re- 
ferred to,  which  Section  makes  special  provision  for 
repayment  in  case  of  erroneous  payments  in  the  matter 
of  an  inheritance  tax. 

The  difficulty  encountered  in  this  regard,  however,  is 
the  requirement  of  said  Section  10  that  application  for 
repayment  must  be  made  within  two  years  from  the  date 
of  payment.  In  this  case,  payment  was  made  to  the 
County  Treasurer  April  26, 1907,  and  the  two  years '  lim- 
itation therefore  had  run  April  26,  1909.  The  evidence 
further  shows  that  neither  during  that  period,  nor  after- 
ward, was  any  application  made  to  the  State  Treasurer 
for  repayment,  either  by  the  County  Treasurer  of  Cook 
County,  or  the  claimant,  and  the  question  therefore  arises 
whether  claimant  is  barred  of  recovery  in  this  cause  by 
limitation. 

Section  10,  referred  to  above,  is  somewhat  vague  and 
uncertain  as  to  the  manner  in  which  application  for  re- 
payment is  to  be  made  or  as  to  the  person  by  whom  or 
to  whom  such  application  is  to  be  made.  As  conditions 
precedent  to  repayment,  two  incidents  are  to  concur: 
First,  the  County  Treasurer  is  to  render  to  the  State 
Treasurer  satisfactory  proof  of  the  erroneous  payment, 
and,  secondly,  an  application  is  to  be  made  for  repay- 


422 

ment,  but  whether  application  is  to  be  made  by  the  payer 
to  the  County  Treasurer,  by  the  payer  to  the  State  Treas- 
urer, or  by  the  payer  to  the  County  Treasurer  and  then 
by  the  County  Treasurer  to  the  State  Treasurer,  is  not 
at  all  evident  from  the  context. 

It  would  seem  to  be  the  most  natural  method,  however, 
for  the  person  who  had  erroneously  paid  the  tax  to  the 
County  Treasurer  to  apply  for  repayment  to  the  very 
same  officer  to  whom  payment  in  the  first  instance  was 
made  and  that  the  County  Treasurer,  who  is  presumed 
to  have  paid  this  erroneous  tax  to  the  State  Treasurer, 
would  thereupon  make  proof  of  the  erroneous  payment 
to  said  State  Treasurer  and  the  latter  officer  then  make 
payment. 

Again  under  Section  10  referred  to,  repayment  is  to 
be  made  by  the  State  Treasurer  upon  satisfactory  proof 
being  made  to  him  by  the  County  Treasurer,  of  the  er- 
roneous payment.  It  is  unlikely  that  the  County  Treas- 
urer would  render  such  proof  unless  application  were 
first  made  to  him  for  repayment  by  the  party  erroneous- 
ly paying  the  tax,  notice  of  the  erroneous  payment  being 
thus  brought  to  his  attention,  and  it  is  not  unreasonable 
to  suppose  that  this  is  the  application  which  is  intended 
should  be  made  within  the  two  years'  period. 

There  is  no  definite  direction  in  Section  10  as  to  this 
matter  of  application  and  there  is  nothing  in  the  sec- 
tion to  indicate  that  the  application  is  to  be  accompanied 
by  any  formality.  In  this  case,  at  the  time  the  tax  was 
paid,  claimant  expressed  protest  by  endorsing  the  same 
on  the  check.  This  protest  was  followed  by  an  appeal 
by  the  claimant,  from  the  Order  of  the  County  Judge, 
fixing  the  tax,  and  by  the  time  the  County  Court  rendered 
its  opinion  that  part  of  the  tax  was  illegal,  the  limitation 


423 

had  run.  There  was  no  laches  or  lack  of  diligence  on  the 
part  of  the  claimant.  She  was  protesting  against  the  pay- 
ment all  the  time  and  was  seeking  relief  from  the  same 
by  the  only  legal  remedy  at  hand,  following  her  remedy 
to  the  Supreme  Court  of  the  State. 

Her  acts  and  conduct  in  the  matter  constituted  a  con- 
structive application  of  the  very  strongest  kind  and  was 
of  a  continuing  character. 

From  all  the  facts  in  this  case,  it  is  the  opinion  of  this 
Court  that  not  only  as  a  matter  of  equity  and  justice  is 
claimant  entitled  to  an  award,  but  such  an  award  is  also 
in  conformity  with  law.  Her  claim  for  $497.09  is  there- 
fore hereby  allowed. ' ' 


TABLE  OF  CASES. 


TABLE  OF  CASES. 


Containing  Cases  Cited,  and  Those  Referred  to  in  Quoted  Opinions. 

Matter  of:  Page. 

Abbett,  29  Misc.  Eep.  (N.  Y.)   567 84 

Allen  V.  National  State  Bank,  92  Md.  509,  48  Atl.  78,  52  L.  R.  A. 
760,  84  Am.  St.  Rep.  517 73 

Althause,  63  App.  Div.  (N.  Y.)  252.   Affd.  168  N.  Y.  670 45 

Alvany  v.  Powell,  2  Jones  Eq.   51 51 

Amherst  College  v.  Ritch,  151  N.  Y.  282 186 

Anthony,  82  N.  Y.  S.  789 102 

Arnot,  130  N.  Y.  S.  499 123 

Astor,  2  N.  Y.  S.  630 200 

Astor,  17  N.  Y.  St.  Rep.  787 203 

Mrs.  Astor,  20  Abb.  N.  C.  405-415 372 

Attorney  General  v.  Bouwens,  4  M.  &  W.  171 51 

Attorney  General  v.  HI.  Agricultural  College,  85  111.  516 228 

Attorney  General  v.  Montifiore,  59  Law  T.  Rep.  534 102 

Attorney  General  v.  Rafferty,  95  N.  E.  (Mass.)  747 151 

Ayers  v.  Title  &  Trust  Co.,  187  111.  42 32,  35,  136,  139,  179,  204 

Babcock,  37  Misc.  Rep.  (N.  Y.)  445;  75  N.  Y.  S.  926;  81  App. 
Div.  (N.  Y.)  645;  81  N.  Y.  S.  1117 272 

Babcock,  115  N.  Y.  450 215 

Backhouse,  110  App.  Div.   (N.  Y.)   737 118 

Bailie,  38  N.  E.  Rep.  1007 280 

Baker,  83  App.  Div.  (N.  Y.)  530;  82  N.  Y.  S.  390;  Affd.  178  N. 
Y.  575   40 

Balleis,  144  N.  Y.  132 283 

Barnum,  129  App.  Div.  (N.  Y.)  418 190 

Baxter  v.  Stevens,  95  N.  E.  854 17 

Beach,  19  App.  Div.  (N.  Y.)  630 128 

Beach,  154  N.  Y.  242 128 

Becker,  26  Misc.  Rep.    (N.  Y.)    633 216 

Beers  v.  Glynn,  211  U.  S.  477 233 

Bell,  130  N.  W.  (Iowa)  798 100 

BelPs  Gap  R.  R.  v.  Penna.,  134  U.  S.  232 11 

Benton,  234  111.  366 91,  179 

[427] 


428  TABLE    OF    CASES. 

Matter  of:  Page. 

Berry,  23  Misc.  Eep.  (N.  Y.)  230 216 

Billings  V.  People,  189  111.  472 15,  16,  32,  35,  38,  39,  40,  44 

53,  136,  137,  144,  179,  199,  247,  255,  408 

Bird,  32  St.  Eep.  (N.  Y.)  899 123,  127,  134 

Blackstone  v.  Miller,  188  U.  S.  189 56,  74,  75,  76,  80,  83 

Blanchard  v.  Williamson,  70  111.  647 154 

Bloomington  Tp.  v.  City  of  Bloomington,  97  N.  E.  (111.)  280 172 

Board  of  Education  v.  People,  203  U.  S.  553 408 

Bogert,  25  Misc.  Eep.  (N.  Y.)  466 139 

Borup,  28  Misc.  Eep.  (N.  Y.)  474 101 

Bostwick,  38  App.  Div.  (N.  Y.)  223.    AfPd.  160  N.  Y.  489 98 

Bowen  v.  People,  Cook  County  Court  Case  No.  24872 130 

Bradley  v.  Holdsworth,  3  M.  &  W.,  p.  424 71 

Brandreth,  28  Misc.  Eep.  (N.  Y.)  468 208 

Brandreth,    169   N.   Y.   437 99 

.  Brewer,  16  Pittsb.  Leg.  J.  114 102 

Brez,  172  N.  Y.  609,  reversing  69  App.  Div.  (N.  Y.)  619,  108,  257,  261 

Bristol  V.  Washington  Co.,  177  U.  S.  133 73 

Bronson,  150  N.  Y.  1 54,  55,  58,  65,  71,  72 

Bruce,  59  N.  Y.  S.  1083 191 

Buckout  V.  City  of  N.  Y.,  176  N.  Y.  363,  68  N.  E.  659 215 

Buckingham,  106  App.  Div.  (N.  Y.)   13 32,  114 

Bushnell,  73   App.   Div.    (N.  Y.)    325 55,  262 

Butler,  65  Sup.  Ct.  Eep.  (N.  Y.)  400 126 

Byrd  v.  People,  253  111.  223 262 

Caldver  v.  Bull,  3  Dall.  386 224 

Callahan  v.  Woodbridge,  171  Mass.  595 51,  65 

Campbell  v.  Gonsalus,  25  N.  Y.  613 270 

Carpenter  v.  Pennsylvania,  17  How.  456 222 

Carroll,  128  N.  W.  (Iowa)  929 147 

Carver,  4  Misc.  Eep.   (N.  Y.)   592 47 

Chanler  v.  Kelsey,  205  U.  S.  466 113 

Chicago,  etc.,  E.  Co.  v.  Sturm,  174  U.  S.  710 77 

Citizens'  Nat.  Bank  v.  Kentucky,  217  U.  S.  445 166 

City  of  N.  Y.  V.  McLean,  170  N.  Y.  374-383 194 

Clapp  V.  Mason,  94  U.  S.  589 10 

Cleveland  Trust  Co.  v.  Lander,  184  U.  S.  Ill 22 

Clinch,  180  N.  Y.  300 80,  83 

Commonwealth 's  Appeal,   34   Pa.  St.   204 143 

Com.  V.  Kuhn,  2  Pa.  Co.  Ct.  E.  248 102 

Commonwealth  v.  Smith,  20  Pa.  St.  100 143 

Connell  v.  Crosby,  210  111.  380. 43,  44,  179,  210,  213 


TABLE   OF    CASES.  ~  429 

Matter  of:  Page. 

Conwell,  45  Leg.  Int.  266 103 

Coogan,  27  Misc.  Kep.  (N.  Y.)   563.    Affd.  45  App.  Div.  (N.  Y.) 
628;  162  N.  Y.  613 193,  194 

Cooksey,  182  N.  Y.  92 115,  118,  119 

Cook,  187  N.  Y.  253. 18,  122,  127 

Cook,  125  App.  Div.  (N.  Y.)  114,  194  N.  Y.  400 195 

Cooley  on  Taxation,  Vol.  2,  3rd,  p.  832 166 

Cooley,  186  N.  Y.  220 63 

Cooper,  127  Pa.  435 35 

Cornell,  66  App.  Div.  (N.  Y.)  162,  170  N.  Y.  423 100,  221 

Crary,  64  N.  Y.  S.  566 209 

Crawford,  126  N.  W.  (Iowa)  774 286 

Crerar  v.  Williams,  145  111.  625 282,  288 

Crerar,  56  App.  Div.  (N.  Y.)  479 190 

Cruger,  54  App.  Div.  (N.  Y.)  405 100 

CuUen,  142  Pa.  18 248 

Cullom,  145  N.  Y.  593 284 

Culver,  123  N.  W.  (Iowa)  743 54 

Curtice,  111  App.  Div.  (N.  Y.)  230 208 

Curtis,  142  N.  Y.  219 36 

Curtis,  31  Misc.  Eep.  (N.  Y.)  83 216 

Daly,  100  App.  Div.    (N.  Y.)    373;   91  N.  Y.  S.  858.    Affd.  182 
N.  Y.  524 74,  82 

Dammert  v.  Osborn,  141  N.  Y.  564 16 

Davenport's  Appeal,  3  Pa.  Sup.  Ct.  Dig.  236 102 

Davis,  98  App.  Div.  (N.  Y.)  546,  184  N.  Y.  299 130 

Davis,  149  N.  Y.  539 144,  199,  204,  272,  374 

Delano,  69  Atl.  Eep.  (N.  J.)  482 57 

Delano,  176  N.  Y.  486 110,  112 

Louisa  Del  Busto,  23  Weekly  Notes  Cases  111 143 

Deutsch,  107  App.  Div.  (N.  Y.)   192 127 

Dingman,  66  App.  Div.  (N.  Y.)  228 17 

Dixon  V.  Eussell,  73  Atl.  51 185,  230 

Dodge  County  v.  Burns,  131  N.  W.  (Neb.)  922 84 

Dos  Passos  Collateral  Inheritance  Tax,  20 10 

Dowell's  History  of  Taxation  in  England,  148 9 

Dows,  167  N.  Y.  227 106,  112 

Dubois  Appeal,  121  Pa.  St.  368,  15  Atl.  641 102 

Dunaway  v.  Campbell,  59  111.  App.  665 154 

Duror  v.  Motteux,  1  Ves.  Sr.  320 288 

Duryea,  128  App.  Div.  (N.  Y.)  205 126 

Earle,  74  App.  Div.   (N.  Y.)  458 270 


430'  TABLE    OF    CASES. 

Matter  of:  Page. 

Edson,  38  App.  Div.  (N.  Y.)   19.    Affd.  159  N.  Y.  568 186 

Edwards,  85  Hun   436 101 

Eidman  v.  Martinez 53 

Embury,  19  App.  Div.  (N.  Y.)  214-218 58,  149,  233 

Ennis  v.  Smith,  14  How.  400 224 

Enston,  113  N.  Y.  174,  21  N.  E.  87;  3  L.  E.  A.  464.  .5,  15,  48,  52,  56,  71 

Expanded  Metal  Fireproofing  Co.  v.  Boyce,  233  HI.  284 178 

Eyre  v.  Jacob,  14  Grat.  422 10 

Fallows  on  Inheritance  Tax  and  Transfer  Law  of  N.  Y.  366,  . . .    168 

Farley,   15  N.  Y.   St.  Eep.   727 236 

Fayerweather,  143  N.  Y.  114;  38  N".  E.  278 15,  123,  143 

Fearing,  200  N.  Y.   340 117 

Fernandes  Case,  L.  E.  5,  Ch.  314 51 

First  Nat.  Bank  of  Mendota  v.  Smith,  65  HI.  44-55 65 

Fisch,  34  Misc.  Eep.   (N.  Y.)   146 127 

Fitch,  160  N.  Y.  87;  39  App.  Div.  (N.  Y.)  609 55,  58 

Fletcher  v.  Peck,  6  Cranch  87 224 

Forsyth,  10  Misc.  Eep.  (N.  Y.)  477 20 

Frazer  v.  People,  3  N.  Y.  S.  134;  6  Dem.  174 147,  370,  372 

Freund,  128  N.  Y.  S.  48 215 

Frothingham  v.  Shaw,  175  Mass.  59 16 

Fuller,  62  App.  Div.  (N.  Y.)  428 185 

Gardiner  v.  Carter,  69  Atl.   (N.  H.)   939 55,  64 

Gautier  v.  Ditmar,  129  N.  Y.  S.  834 144 

Gelsthorpe  v.  Furnell,  51  Pac.  Eep.   (Mont.)   267 10 

Gen.  St.  1895,  p.  3341,  p.  268 56 

Gibb's  Estate,  83  N.  Y.  S.  53 53 

Gibbes,  84  App.  Div.  (N.  Y.)  510 68 

Gibbon's  Eoman  Empire,  Vol.  1,  Ch.  6,  pp.  158-9 2 

Gibbon 's  Decline  and  Fall  of  the  Eoman  Empire,  Vol.  1,  pp.  163- 

164 9 

Gihon,  169  N.  Y.  443,  modifying  64  App.  Div.  (N.  Y.)  504.147,  214,  216 

Gilman,  6  Dem.  Sur.  358 235 

Giozza  V.  Tierman,  148  U.  S.  657 12 

Glendenning,  68  App.  Div.  (N.  Y.)  125 79 

Goelet's  Estate,  78  N.  Y.  S.  47 270,  272 

Gordon,  186  N.  Y.  471 83,  219 

Gould,  48  N.  Y.  S.  872 276 

Gould,  19  App.  Div.   (N.  Y.)   352 207 

Gould,  46  N.  Y.  S.  506 206,  214 

Gould,  156  N.  Y.  423 31,  32,  33 


TABLE   OF   CASES.  431 

Matter  of:  Page. 

Graves,  242  lU.  212...  14,  15,  17,  32,  121,  138,  141,  199,  204,  210,  247 

Graves,  242  111.  24 282 

Green 's  Law  of  Taxable  Transfers,  2d  Ed 65 

Green  v.   Craft,   2  H.  Bl.   30 9 

Green's  Estate,  129  N.  Y.  S.  54 19,  38 

Greene,  153  N.  Y.  223 17,  99 

Greves  v.  Shaw,  173  Mass.  205 65 

Griffith  Ex.  v.  State  of  Illinois,  Court  of  Claims,  418-419.  .171,  172 

Gulf,  Colo.  &  Santa  Fe  By.  v.  Ellis,  165  17.  S.  150 13 

Grosvenor,  124  App.  Div.   (N.  Y.)  331 83,  219 

Hacket,  14  Misc.  Rep.  (N.  Y.)  282;  35  N.  Y.  S.  1051 

149,   154,  221,  236 

Haggerty,  128  App.  Div.   (N.  Y.)  479 119 

Haight  V.  Pittsburgh,  Ft.  Wayne  &  Chicago  R.  E.  Co.,  73  U.  S. 
15 166 

Hamilton,  148  N.  Y.  310 287 

Harbeck,  161  N.  Y.  211;  55  N.  E.  850 15 

Harder,  108  N.  Y.  S.  154 130 

Hellman,  174  N.  Y.  254,  reversing  77  App.  Div.  (N.  Y.)  355 293 

Henavie  v.  N.  Y.  C.  &  H.  R.  R.  R.  Co.,  154  N.  Y.  281 292 

Herron,  Treasurer  v.  Keeran,  59  Ind.  472,  476 49 

Hess,  110  App.  Div.  (N.  Y.)  476.    Affd.  187  N.  Y.  554 100 

Heuser  v.  Harris,  42  111.  425 288 

Hill  V.  Atkinson,  2  Merivale  45 9 

Hite,  113  Pac.   (Cal.)  1072 202,  204 

Hoeffer  v.  Clogan,  171  111.  462 287 

Hoffman,  143  N.  Y.  334 35 

Holden  Estate,  Appraisement  No.  2173 39 

Houdayer,   150  N.   Y.   37 50,  76,  83 

House  V.  Loekwood,  137  N.  Y.  259 270 

Howard,  5  Dem.  483 47 

Howe,  86  App.  Div.  (N.  Y.)  286.   Affd.  176  N.  Y.  570 32,  109 

Howe,  112  N.  Y.  100 134 

Hoyt,  76  N.  Y.  S.  504 263 

Hoyt,  37  Misc.  Rep.   (N.  Y.)   720 142 

Hubbard,  21  Misc.  Rep.  (N.  Y.)  566 150,  233 

Huber,  86  App.  Div.  (N.  Y.)  458 34 

Hughes  V.  Golden,  44  Misc.  Rep.  (N.  Y.)  128 147 

Hull,  109  App.  Div.   (N.  Y.)   248 194 

Hull,  111  App.  Div.    (N.  Y.)   322 112 

Humphrey  v.  State,  70  N.  E.  957 280 


432  TABLE    OF    CASES. 

Matter  of:  Page. 

Hunt,   86  Hun    232 128 

Hunt,  33  K  Y.  S.  256 128 

Irish,  28  Misc.  Eep.  (N.  Y.)  647 216 

Jackson  v.  Phillips,  14  Allen  539 288 

James,   144  N.  Y.    6 62,  53,  55,  66,  68,  71,  147 

Jenison  v.  Hapgood,   10  Pick  77 16 

Jermain  v.  L.  S.  &  M.  S.  E.  E.  Co.,  91  N.  Y.  492 71 

Johnson,  19  N.  Y.  Supp.  963 102 

Jones,  5  Dem.  Eep.  30 154 

Jones,  59  N.  Y.  S.  983,  28  Misc.  Eep.  (N.  Y.)  356. .  .139,  140,  202,  209 

Jones,  54  Misc.  Eep.  (N.  Y.)  202 276 

Jones,  172  N.  Y.  575;   65  N.  E.  570 46 

Kantzler  v.  Bensinger,  214  111.  589 178 

Kavanaugh,  6  N.  Y.  669 122 

Keenan,  5  N.  Y.  S.  200 231,  245 

Keeney,    194    N.    Y.    281 200 

Keeley,  29  Misc.  Eep.  (N.  Y.)  169 202 

Kelly  V.  Ehoads,  188  U.  S.  1  ante  359;  23  Sup.  Ct.  Eep.  259 74 

Kelsey  v.  Church,  112  App.  Div.  (N.  Y.)  408 184 

Keeney,  194  N.  Y.   281 138 

Kennedy,    113    App.    Div.    (N.    Y.)    4 187,  201 

Kidd,  188  N.  Y.  274 41 

King,  30  Misc.  Eep.    (N.   Y.)    575 79 

Kingman,   220   111.   563 139,  179,  255 

Kingsbury  v.  Chapin,  82  N.  E.  (Mass.)  700 63,     84 

Kinney  v.  Stevens,   93   N.   E.   586 74 

Knoedler,  140  N.  Y.  377;   35  N.  E.   601 19,     46 

Knowlton  v.  Moore,   178  U.  S.  41 122 

Kocherspercer  v.  Drake,  167  111.   122 6,  15,  121,  179 

Langdon,    153    N.    Y.    6 117 

Lange,  55  N.  Y.  S.    (89  St.  Eep.)    750 139 

Lansing,  182   N.  Y.   238 112,  120 

Lansing,  64  N.  Y.  S.  1125 187,  188 

Lansing,  31  Misc.  Eep.  (N.  Y.)  148 203 

Large  v.  McLain,  7  Atl.  Eep.  101 152 

Lawrence,  96  App.  Div.  (N.  Y.)  29 189 

Lines   (1893),  155  Pa.  St.  378,  26  Atl.  728 102 

Liss,  78  N.  Y.  S.  969 215,  216 

Livingston,  1  App.  Div.  (N.  Y.)  568 216 

Lockwood  V.  Johnson,  106  111.  334 166 

Lord,   111  App.  Div.   (N.  Y.)    152 81,  116 


TABLE    OF    CASES.  433 

Matter  of:  Page. 

Lowndes,  60  Misc.  Eep.  (N.  Y.)   506 115,  203 

Lowry,  89   App.  Div.    (N.  Y.)    226 190,  192 

Ludlow,  4  Misc.  Eep.   (N.  Y.)   594 203 

Mager  v.   Grima,  8  How.  490 47 

Magoun  v.  Illinois  Trust  and  Savings  Bank,  170  U.  S.  283 .  .  9,  15,  105 

Manning,  169  N.  Y.  449 34 

Maris  Estate,  50  Leg.  Int.  458;  14  Pa.  Co.  Ct.  Eep.  171;  3  Pa. 

Dist.  E.  33 101 

Marshall  v.  Marshall,  252  111.   568 342 

Mason,  120  App.  Div.  (N.  Y.)   738 271 

Masury,   28  App.   Div.    (N.  Y.)    580,   aff'd   without   opinion   159 

N.    Y.    532 97 

Mayor  v.  Tunis  (N.  J.),  78  Atl.  1066 207 

MeCarvey,  6  Dem.  145 126 

McCormick  v.  SuUivant,  10  Wheat.  202 11 

McCulloch  V.  Maryland,  4  Wheat.   (U.  S.)  316,  429 76 

McCurdy  v.  McCurdy,  197  Mass.  248;  83  N.  E.  881;  16  L.  E.  A. 

(N.  S.)    329    32,  43,  45,  50,  73 

McDowell  V.  Adams  et  al.,  45  Pa.  430 132 

McKnight  v.  Glynn,  106  N.  Y.  S.  956 195 

McLean  v.  Jephson,  123  N.  Y.  142 194 

McPherson,   104  N.  Y.  306 5 

Mergentime,  129  App.  Div.  (N.  Y.)  367,  aff*d  195  N.  Y 287 

Merriam's  Estate,  141  N.  Y.  479 10,  284 

Merriam,  147  Mich.  630;   111  N.  W.  196;  9  L.  E.  A.  1104;   118 

Am.    St.    Eep    561 73,     77 

Merrifield  Estate  v.  People,  212  111.  400 89,  92,  179 

Meyer,  83  App.  Div.  (N.  Y.)  381 268 

Micklewait,   11  Exch.  452 102 

Miller,  45  Hun  244 123 

Miller,  110  N.  Y.  216 194,  292 

Miller^s    Estate,    182    Pa.    157 143 

Miller  v.  Tracy,  86  N.  Y.  S.  1024;  93  App.  Div.  (N.  Y.)  27 266 

Miller  v.  Wolfe,  115  Tenn.  234 252 

Mills,  67  N.  Y.  S.  956;  32  Misc.  Eep.  (N.  Y.)  493 44 

Milne,  76  Hun   328 144 

Minnesota  v.  Central  Trust  Co.  94  Fed.  Eep.  244;  36  C.  C.  A.  214. .  248 

Minot  V.  Philadelphia  W.  &  B.  E.  E.  Co.,  85  Pa.  230 166 

Minot  V.  Winthrop,  162  Mass.  113 10 

Moffitt  V.  Kelly,  31  Supt.  Ct.  Eep.  79 42 

Moody  V.  Shaw,  173  Mass.  375 59 


434  TABLE    OF    CASES. 

Matter  of:  Page. 

Moore,  90  Hun    162;  35  N.  Y.  S.  782 15,  123,  127,  129,  144 

Moore,  97  Sup.  Ct.   (N.  Y.)    162 123 

Morgan,  150  N.  Y.  35 50,     68 

Morgan,  36  Misc.  Eep.  (N.  Y.)  753j  74  N.  Y.  S.  478 213 

Moses,  123  N.  Y.  S.  443 290 

Myers  Estate,  129  N.  Y.  S.  194 42,     75 

National  Bank  v.  Commonwealth,  76  U.  S.  353 166 

National  Safe  Deposit  Co.  v.  Stead,  250  111. 

584     14,  15,  32,  141,  159,  195,  299,  352 

Neilson  v.  Eussell,  71  Atl.  (N.  J.)  286 57 

N.  Y.  Act  of  1885  (Laws  1885,  p.  820,  c.  483,  Sec.  1) 56 

Nichols,  98  Sup.  Ct.  Eep.  (N.  Y.)  134 129 

Nielson  v.  Eussell,  69  Atl.  (N.  J.)  476 56 

Nieman,   131   Pa.   346 35 

Niven,  61  N.  Y.  S.  956 188 

O'Donohue,  44  App.  Div.  (N.  Y.)  186 182 

Offerman,  25  App.  Div.  (N.  Y.)  94 216 

Orcutt's  Appeal,  97  Pa.  St.  179,  186 51 

Orr  V.  Gilman,  183  U.  S.  278 224 

Ottawa  Glass  Co.  v.  McCaleb,  81  111.  556 166 

Palmer,  183  N.  Y.  238 59 

Pell,  60  App.  Div.  (N.  Y.)  286 22 

Pell,  171  N.  Y.  48 22 

Pelton,  ION.  Y.  S.  643 236 

People  V.  Burkhalter,  247  111.   600 '. 96 

People  V.  Cameron,  124  N.  Y.  S.  949 123,  290 

People  V.  Coleman,  107  N.  Y.  544 206 

People  V.  Estate  of  Marshall  Field,  248  111.  147 40,  218 

People  V.  Gould,  No.  24150  County  Court  Cook  County,  111 148 

People  V.  Griffith,  245  111.  532 19,  53,  66,  170,  171,  172,  351 

People  V.  Kelley,  218   111.   509 92,  94,  179 

People's  Loan  &  Homestead  Ass'n  v.  Keith,  153  111.  609 166 

People  V.  McCormick,  208  111.  437 35,  144,  179,  255,  381 

People  V.  Mills,  247  111.  620 177,  220,  231,  333,  346 

People  V.  Moir,   207  111.   180 93,  179,  220,  231 

People  V.  Nelms,  241  111.   571 138,  139,  204,  343 

People  V.  Pierce,  6  111.  553 228 

People  V.  Eaymond,  188  111.  454 241,  243 

People  V.  Eice,  40  Col.  508;  91  Pac.  33 143,  144 

People  V.  Sholem,  238  111.  203 177,  180,  197,  198,  299,  352 

People  V.  Western  Seaman's  Friend  Society,  87  111.  246.  .279,  286,  290 


TABLE    OF    CASES.  435 

Matter  of:  Page. 

Peoria  Gas  Lt.  Co.  v.  Peoria  Terminal  Ey.  Co.,  146  111.  372 205 

Peters,  N.  Y.  Law  Journal,  Mar.  25,  1909 102 

Peters,  74  N.  Y.  S.  1028 186 

Phipps,  77  Hun    325.    Affd.  143  N.  Y.  641 80,  81 

Piatt,  29  N.  Y.  S.  396 143 

Plummer,  30  Misc.  Eep.  (N.  Y.)  19.   Affd.  Plummer  v.  Coler,  178 
U.  S.  115  47 

Porter,  124  K  Y.  S.  676 81,  219,  233 

Post,  5  App.  Div.  (N.  Y.)   113 276 

Preston,  78  N.  Y.  S.  91 72 

Prime,   136  N.  Y.   347 123,  285,  289,  294 

Prout,  3  N.  Y.  S.  831 143,  150,  236 

Provart  v.  Harris,  150  HI.  40 178 

Provident  Hospital  v.  People,  198  HI.  495 142,  179,  184,  278 

Pullman,  46  App.  Div.  (N.  Y.)   574 54,  218 

Purdy,  24  Misc.  Eep.  (N.  Y.)  301 219 

Eathbone  v.  Bank  of  Metropolis,  N.  Y.  Law  Journal,  June  15, 
1904 168 

Bay,  S35  N.  Y.  S.  481 126 

Eamsdill,  190  N.  Y.  492 85 

Eeish  V.  Com.,  42  Leg.  Int.  102.   Affd.  106  Pa.  St.  521 102 

Eeview  of  Eeviews,  Feb.,  1893 10 

Eiemann,  87  N.  Y.  S.  731 38 

Eice,  29  Misc.  Eep.   (N.  Y.)  404 202,  217 

Eobinson  v.  Martin,  200  N.  Y.  159 259 

Eogers,  149  Mich.  305;  112  N.  W.  931;  11  L.  E.  A.  (N.  S.)  1134; 
119  Am.  St.  Eep.  677   73,  74,  77,  78 

Eogers,  75  N.  Y.  S.  835 120 

Eomaine,  127  N.  Y.  80 5,  49,  52,  168 

Eoosevelt,  143  N.  Y.  120 35 

Eosenthal  v.  People,  211  111.  306 88,  92,  179 

Eothchild,  71  N.  J.  Eq.  210 285 

Eussell  V.  Madden,  95  111.  485 16 

Sandberg  v.  State,  113  Wis.  578 228 

Sanford,  123  N.  Y.  S.  284 218 

Sanf ord,  133  N.  W.  870  (Neb.) 17,  38,  142,  143 

Savings  &  Loan  Society  v.  Multoomah  County,   169  U.  S.  421; 
18  Sup.  Ct.  392 73 

Schermerhorn,  57  N.  Y.  S.  26 193 

Sehermerhorn,  50  Misc.  Eep.  (N.  Y.)  233 68 

Schermerhorn,  38  App.  Div.  (N.  Y.)  350 190 

Scholey  v.  Eew,  23  Wall.  331 10 


436  TABLE    OF    CASES. 

Matter  of:  Page. 

Schoolfield  v.  Lynchburg,  78  Va.  366 10 

Scott  V.  People,  310  111.  594 166 

Scrimgeour,  80  App.  Div.  (N.  Y.)  389 194 

Seaman,  147  N.  Y.  69;  87  Hun    619 37,  97,  101,  122 

Seibert's  Appeal,  110  Pa.  St.  329;  1  Atl.  346 102 

Seaver,  63  App.  Div.   (N.  Y.)   283 107,  115,  232 

Seaver,  71  N.  Y.  S.  544 120 

Seymour,  128  N.  Y.  S.  775 221 

Sharer,  73  N.  Y.  S.  1057 102 

Shelton  v.  Campbell,  109  Tenn.  690 143 

Sherman,  153  K  Y.  1 46,  105 

Sherman,  15  App.  Div.  (N.  Y.)  628 46 

Sherwell,  125  N.  Y.  376 134 

Shields,  124  N.  Y.  S.  1003 38 

Sholem,  238  111.  203 195,  220,  231,  347 

Sloane,  154  N.  Y.  109 15,  32,  139,  189,  199,  207,  256,  272 

Smith,  71  App.  Div.  (K  Y.)  605 208,  209 

Spangler,  127  N.  W.  (Iowa)  625 286 

Speed,  216  111.  23-28.   Affd.  203  U.  S.  553 179,  282,  408 

Springer  v.  Bien,  128  N.  Y.  99 270 

Stanton,  142  Mich.  491 77,  78 

Stanford,  126  Cal.  112 14 

Stanley  v.  Schwalby,  162  U.  S.  255 228 

Stanley  v.  Supervisors  of  Albany,  121  U.  S.  535 194 

Starbuck,  137  App.  Div.  (N.  Y.)   866 19,  38 

State  V.  Alston,  94  Tenn.  674 9,  10 

State  V.  Dalrymple,  70  Md.  294;  3  L.  R.  A.  372;  17  Atl.  82 

10,  51,  57,  67 

State  V.  Hamlin,  86  Maine  495 10 

State  Street  Trust  Co.  v.  Stevens,  95  N.  E.  (Mass.)  851 101 

Stauffer,  119  La.  66 79 

Stebbins,  103  N.  Y.  S.  563 130 

Stewart,  131  N.  Y.  274;  30  N.  E.  184 15,  143 

Stewart,   147  Pa.   383 248 

Stilwell,  34  N.  Y.  S.  1123 128 

Stokes  V.  Foote,  172  N.  Y.  327 270 

Strang,  102  N.  Y.  S.  1062 149 

Strang,  117  App.  Div.  (N.  Y.)  796-99 149,  251 

Street  R.  E.  v.  Morrow,  87  Tenn.  406-427 65 

Strode  v.  Commonwealth,  52  Penn.  St.  181 10,  47 

Stuyvesant,  131  N.  Y.  S.  197 33 


TABLE   OF    CASES.  437 

Matter  of:  Page. 

Sutton,  3  App.  Div.   (N.  Y.)  208.    Affd.  149  N.  Y.  618.. 43,  105,  216 

Swift,  137  N.  Y.  77;  32  N.  E.  1096;  18  L.  E.  A.  709 

16,  36,  43,  44,  45,  105,  216 

Tappan  v.  Merchants  Nat.  Bank,  19  Wall.  490-500 65 

Thayer,   193   N.  Y.  430,  Aff'g  Thayer,   126  App.  Div.    (N.  Y.) 

951 63 

Thomas,  3  Misc.  Eep.  (N.  Y.)  388 80 

Thomson,   5  Wkly.  Notes   Cas.   19 102 

Thomson  v.  Advocate  General,  12  CI.  &  F.  1 51 

Thome,  44  App.  Div.   (N.  Y.)   8 201 

Thorne,  60  N.  Y.  S.  419 100 

Thrall,   30  App.  Div.    (N.  Y.)    271 217 

Thrall,   157   N.   Y.   46 217 

Tiffany,  128  N.  Y.  S.  106 72 

Tracy,  179  N.  Y.  501-09 262,  263 

Tucker,  59  N.  Y.  S.  699 120 

Tulane,  51  Hun    213 48 

Twigg,  15  N.  Y.  S.  548 47 

Ullman,  137  N.  Y.  403 186 

U.  S.  V.  Baltimore  &  Ohio  E.  E.  Co.,  84  U.  S.  322 166 

U.  S.  V.  Banks,  17  Fed.  Eep.  322 41 

U.  S.  V.  Fox,  94  U.  S.  315-320 10 

U.   S.   V.   Hart,   4   Fed.   Eep.    292 96 

U.  S.  V.  Perkins,  163  U.   S.   625-629 10,  47,  76 

U.  S.  V.  Eingold,  8  Peters  150 228 

U.  S.  V.  Barker,  2  Wheat.  395 228 

Vanderbilt,  172  N.  Y.  69;  64  N.  E.  782.108,  142,  257,  261,  263,  264,  265 

Vanderbilt,  163  N.  Y.  597;  50  App.  Div.  (N.  Y.)  246 105,  109 

Vanderbilt,  10  N.  Y.  S.  239 150,  188,  196,  200,  236 

Vassar,  127  N.  Y.  1;  27  N.  E.  394 15,  199 

Walker    Estate,    Cook    County    Court    (HI.)    Appraisement    No. 
3355 131 

Walker  v.  People,  192  HI.  106 179,  206 

Wallace,  28  Misc.  Eep.  (N.  Y.)  603 192 

Wallace  v.   Attorney  General,  L.   E.   1,   Ch.   1 51 

Wallace  v.  Meyers,  38  Fed.  Eep.  184 5,  47 

Wallace,  71  App.  Div.   (N.  Y.)   284 187,  232 

Walton  V.  Westwood,  73  HI.  125 166 

Walworth,  72  N.  Y.  S.  984 120 

Walworth,  66  App.  Div.   (N.  Y.)  171 107 

Warren  v.  Cook,  116  HI.  199 166 

Waugh  's  Appeal,  78  Pa.  St.  436 102 


438  TABLE    OF    CASES. 

Matter  of:  Page. 

Weston  V.  Goodrich,  93  Sup.  Ct.  Eep.  (N.  Y.)   194;  86  Hud    194 

185,   187 

Westurn,  152  N.  Y.  93 181,  200,  213,  214,  217,  221 

Weeks  v.  Corwell,  104  N.  Y.  325 259 

Whiting,  2  App.  Div.    (N.   Y.)    590 47 

Whiting,  150  N.  Y.  27;  44  N.  E.  715;  34  L.  E.  A.  232;  5  Am.  St. 
Eep.    640    68,  72 

Wheeler,  100  N.  Y.  S.  1044 131 

Wieting  v.  Morrow,  132  N.  W.  (Iowa)  193 85,  173,  219 

Wilkens,  129  N.  Y.  S.  600 201 

Wilmerding,  117   Cal.  281 10 

Winters,  21  Misc.  Eep.  (N.  Y.)  552 196 

Wolfe,  137  N.  Y.  205 150,  184,  197,  231 

Woods,  123  N.  Y.  S.  574 220 

Woolsey,  19  Abbott 's  N.  C.  232 126 

Wormser,  73  N.  Y.  S.  748;  51  App.  Div.  (N.  Y.)  441;  modifying 
28  Misc.  Eep.  (N.  Y.)  608 200,  213 

Wright's  Appeal,  38  Pa.  St.  507 102 

Wyman  v.  Halstead,  109  U.  S.  654 77 

Yates  V.  Insurance  Co.,  200  111.  202 171,  421 

Young  V.  Wittenmyre,  123  111.  303 16 

Zefita,  167   N.  Y.  280-284 80,  81,  149 


GENERAL  INDEX. 


GENERAL  INDEX. 


A 
ACKNOWLEDGED  RELATION:  Page. 

burden  of  proof  is  upon  the  claimant  of  exemption 127 

covers  beneficiary  not  adopted  as  child 128,  129 

children  of  person  to  whom  decedent  stood  in  relation  of  parent 

taxable 129 

parents  of  beneficiary  claiming  exemption  must  be  dead 130 

step-child    cannot    claim    exemption 130,  131 

testator  may  stand  in  relation  to  married  adult 128 

ADMINISTRATION : 

ancillary  administration  necessary  to   tax  at  home  of  corpora- 
tion, owner  non-resident    64 

ADMINISTRATORS  AND  EXECUTORS:     (Also  see  Trustees.) 

executors  cannot  make  arbitrary  distribution  to  reduce  tax.  .  ,  .85,  86 

duty  is  to  pay  tax  147 

must  withhold  tax  from  share  of  beneficiary 147 

executor  must  move  for  appraisement 147 

executor  and  administrator  are  subrogated  in  advancing  tax...  147 
executors  and  administrators  charged  with  collection   and  pay- 
ment  of   tax    147 

executor   of   non-resident   testator   may   apportion    property   for 

taxation 147 

executor  is  personally  liable  for  the  tax 148,  149.  150 

executor  of  non-resident  decedent  liable  for  payment  of  tax. . .  .  150 

when   executor  not  liable    150 

not  relieved  by  discharge  in  the  Probate  Court  without  payment  151 
subrogation  when  covenant  in  deed  transferring  land  subject  to 

tax 151,  152 

not  discharged  by  order  of  the  Probate  Court 153,  154 

Probate  Court  may  demand  voucher  showing  payment  of  tax  by 

administrator 154 

executor  may  appeal 221 

may  be  committed  for  failure  to  pay  tax. 235,  236 

[441] 


442  INDEX. 

ADMINISTRATORS  AND  EXECUTORS— Continued :  Page. 

cannot  object  to  correctment  of  assessment,  when 236 

liability  cannot  be  settled  v.nder  Section  16   (N.  Y.) 236 

liability  not  determinable   on  motion 236 

administrators,  executors,  trustees,  beneficiaries  not  relieved  by 
statute   of  limitations    249,  250 

ADOPTED  CHILD: 

child  of  is  not  "lineal  descendant  of  decedent*^ 123 

widow  of  adopted  son  is  * '  widow  of  a  son " 126 

adoption  effected  in  foreign  state  entitles  beneficiary  to  exemp- 
tion      126 

children  of  are  ^ '  lineal  descendants  of  decedent " 126 

child  of  adopted  child  taxable 127 

ADVANCEMENTS: 

taxable  under  Federal  Law 41 

AMENDATORY  ACT: 

does  not  relieve  previously  vested  interests 292 

when    amounts     to    revision    and    continuation    of    act    super- 
seded   292,  293 

ANNUITIES:    (See  Practice  and  Procedure — Life  Estates — Mortality  Ta- 
bles— Contingent  Transfers) : 

payable  out  of  what  property 258-272 

tax  payable  out  of   258-272 

ANNUITY  TABLES  (See  Mortality  Tables — ^Practice  and  Procedure): 

ANTE-NUPTIAL  CONTRACT: 

when  taxable 39 

legal  effect  is  to  measure  dower  and  rights  of  succession 39 

when  not  taxable  40 

to  make  a  will — property  transferred  by  will 40 

APPEAL  (See  Practice  and  Procedure): 

first  appeal  lies  from  the  County  Judge's  order  of  tax  to  the 

County  Court   178,  220 

trial  in  the  County  Court  on  appeal  is  de  novo 177,  178,  179,  220 

appeal  lies  from  the  County  Court  to  the  Supreme 

Court 177,  178,  179,  220 

Attorney  General  may  appeal  from  County  Judge  to  the 

County  Court 178,  179,  180 

Attorney  General  may  appeal  from  the  County  Court  to  the 

Supreme   Court    178,  179,  180 


INDEX.  443 

APPEAL — Continued:  Page. 

State  is  an  interested  party  and  can  appeal 178,  179,  180 

excessive  valuation  cannot  be  relieved  on  petition,  appeal  neces- 
sary   189,  190 

cannot  be  taken  in  piece-meal 195 

must  appeal  by  petition  220 

appeal  perfected — how 220 

amount  of  bond   220 

bill  of  exceptions 220 

is  common  law  proceeding 220 

notice  of  appeal 221 

attorney  cannot  waive  service 221 

additional  allegations  to  petition  may  be  filed 221 

necessary  to  review  correctness  of  assessment 221 

executor  may  appeal 221 

APPEAISER    AND    APPRAISEMENT     (See    County    Judge— Market 
Value — Bemainders — Life  Estates — Practice  and  Procedure): 

proceeding  is  one   at  law 177 

proceeding  is  governed  by  rules  in  law  action 177 

appraiser  is  public  official 195 

his  appointment  is  evidenced  by  written  order 195 

takes  oath   of  office 195 

duties  are  of  a  quasi  judicial  character 195 

must  serve  notice  on  all  persons  in  interest 195 

The  People,  etc.,  an  interested  party 195 

Attorney    General    representative    of    The   People    in    appraise- 
ments and  appeals    195 

fees  of  appraiser  limited  to  $10.00  per  day 196 

fees  of   appraiser  payable   out   of  inheritance   tax  moneys   col- 
lected in  the   particular  appraisements 196 

if  no  tax  in  the  particular  appraisement,  the  appraiser  cannot 

be  paid   196 

is  entitled  to  reimbursement  for  moneys  necessarily  expended  for 

witness  fees  and   reasonable   disbursements 196 

cannot    engage    counsel    and    charge    the    expense    to    his   serv- 
ices     196-376 

appraisement  must  proceed  under  Section  11  of  the  Illinois  law  197 

value  of  property  fixed  as  of  date  of  death 198,  199 

practice  and  procedure   governed  by  law  in  force   at  the  time 

of  appraisement   199 

contingent  estates  appraisable  199 


444  INDEX. 

APPRAISER  AND  APPRAISEMENT— Continued :  Page. 

cannot  determine  questions   of  law 200 

has  power  to  value  property 200 

may  hear  evidence  on  deductions 200 

Keport  returned  for  additional  proof 202 

second  appraisement  not  permissible  to  increase  value 202 

title  of  appraisement  case 202 

property  omitted  from  first  appraisement 203 

appraiser  in  doubt  reports  property  taxable 203 

appraiser's   duty  ended  with   report 203 

may  use  own  knowledge  about  property  in  fixing  value 204,  206 

another  appraisement  cannot  be  had  to  increase  value  because 

of  defeated  claims  217 

misconduct  of   229 

shall  be  fined  and  discharged 229 

real  estate  in  several  counties. 231 

value    of   life    estate    in    first    appraisement    does    not    diminish 

property  in  second  appraisement 268,  269,  270 

effect    of  prior   valuation   on   second    appraisement    of   property 

postponed   for  taxation    271 

appraisement  on  or  after  July  1st,  1909   (111.) 273 

misappropriation  by  executor  

APPRECIATION  IN  VALUE  AFTER  DEATH.     (See  Increase.) 
ASSESSMENT.     (See  County  Judge.) 

Erroneous   payment   of   tax   does   not   preclude   subsequent   tax- 
ation    113,  114 

ASSOCIATION.     (See  Section  Nine— Joint  Stock  Association.) 
AUDITOR.     (See  Refund  of  Tax— County  Treasurer.) 
AUNT.     (See  Exemption.) 

AWARD: 

taxable  by  decisions  of  County  Court  of  Cook  County 39 

referred  to  in  Billings  v.  People,  189  111.  472 38 

attitude  of  State  Department  of  Justice  on  taxability 385,  386 

B 

BAILEE.    (See  Section  Nine.) 
BANK.     (See  Section  Nine.) 
BENEFICIAL  INTEREST.     (See  Tax.) 


INDEX.  445 

BENEVOLENT.     (See  Exemption.)  Page. 

BENEVOLENT  USE.     (See  Exemption.) 

BOND.     (See  Security  for  Tax.) 

BONDS  AND  NOTES:     (See  Transfer.) 

United  States  bonds  not  taxable 46,  68 

of  United  States — when  taxable   47,  50 

bonds  of  Illinois  corporation  owned  by  non-resident  taxable...     51 
of  foreign   corporation   owned   by  non-resident  not   taxable   in 

Illinois    (L.    1895)    51 

of  domestic  corporation  held  in  taxing  state 53 

when  held  as  collateral  may  not  be  taxable 54 

of  foreign  corporation  taxable  in  state  located 66 

foreign  and  domestic  taxable  in  state  of  location  of  bonds.. 67,  68 

without  taxing  state  not  taxable  in  state  of  incorporation 69 

secured  by  mortgage  on  land  in  New  York  owned  by  non-resi- 
dent, not  taxable   71,  72 

notes  secured  by  mortgage  in  safety  deposit  box  in  New  York ....     72 
notes   of  non-resident   at   owner's   domicile   secured   on   land  in 

Massachusetts  not  taxable    72,  73,  74 

notes  of  non-resident   at  owner's  domicile   secured   on  land  in 
Michigan  taxable    76,  77 

BBOTHEB.     (See  Exemption.) 

BURDEN  OF  PBOOF:     (Also  see  Evidence.) 

burden  is  on  claimant  to  show  exemption 15,  122,  127,  130 

evidence   must   show   income   reserved   to  make  property  trans- 
ferred  taxable    201 

O 

CAPITAL  INVESTED.     (See  Property.) 
CHARITABLE.     (See  Exemption.) 
CHILD.     (See  Exemption.) 

CLERK  OF  COUNTY  COURT: 

collects  $5.00  for  each  case  in  first  and  second-class  counties. . . .  226 

entitled  to  costs  out  of  any  inheritance  tax  collections 226 

entitled  to  fees  in  all  cases 226 

of  County  Court  of  Cook  County 227 

entitled  to  $10.00  for  each  case 227 

may  appoint  tax  clerk 227 


446  INDEX. 

CLKRK  OF  COUNTY  COURT— Continued:  Page. 

salary  fixed  by  judge 227 

excess  fees  to  County  Treasurer 227 

when  People  institute  suit,  fees 227,  228 

COLLATERAL  FOR  DEBT:     (See  Bonds,  and  Stocks.) 

Bonds  held  as  collateral  may  not  be  taxable 54 

COLLECTION  OF  TAX..   (See  Delinquent  Tax— Lien  of  Tax.) 

COMMUNITY  PROPERTY: 

California    statute    taxing    same    constitutional 42 

COMPOSITION.     (See  Compromise  of  Tax.) 

COMPROMISE  OF  TAX:     (Also  see  Forms.) 

State  Treasurer,  with  the  written  consent  of  Attorney  General, 

may  compromise  tax  274 

effected  by  agreement  signed  in  triplicate. 274 

one  copy  retained  by  State  Treasurer 274 

one   copy   retained  by  executor   or  trustee 274 

one  copy  filed  in  the  office  of  the  Clerk  of  County  Court 274 

clerical   error  in   law    275 

compromise    of   litigation    17 

CONSENT  TO  TRANSFER.     (See  Section  Nine  and  Practice  and  Pro- 
cedure.) 

CONSTITUTIONAL: 

law   of   1895   constitutional 4,    6,   7 

law  of  1895  held  constitutional  by  U.  S.  Supreme  Court 9 

law  of  1895  makes  reasonable  classification  for  taxation. ..  .8,  9,  10 
Illinois  Act  of  1895  imposing  tax  on  transfer  in  contemplation 

of  death  is  constitutional 90,  91 

Surrogate  Court  will  assume  statute  is  constitutional 233 

amendment  of  1901  (111.)  exempting  charitable  and  religious  be- 
quests  constitutional    278,  279 

law  of  1895  tax  gift  in  contemplation  of  death.     (See  Transfer.) 
Section  9  is 159 

CONSTITUTIONAL  POWERS: 

Legislature  may  tax  property  transferred  by  will  and  gift.  .31,  90-91 
Legislature  may  create  taxable  transfer  by  exercise  of  power.112, 113 

discrimination  between  lineals  and  collaterals 137 

discrimination   between   beneficiaries   not   unreasonable 137,  138 


INDEX.  447 

CONSTRUCTION  OF  STATUTES:  Page. 

when  in  favor  of  tax  payer 15 

when  against  tax  payer  15 

exemption  will  not  be  presumed — construction  against  claimant.    123 

CONTEMPT  PROCEEDING  FOR  NON-PAYMENT  OF  TAX.     (See  De- 
linquent Tax.) 

CONTINGENT  ESTATES.     (See  Contingent  Transfer.) 

CONTINGENT  INTERESTS:     (See  Contingent  Transfers.) 

appraisable,  even  though  not  presently  taxable 199 

CONTINGENT  TRANSFERS: 

when  not  taxable 254,  255,  272 

origin  of  Section  25    256 

are  presently  taxable    256,  257 

shall  be  assessed  at  highest  rate 258,  259,  260 

when  payment  at  highest  rate  diminishes  corpus 263,  264,  265,  266 

CONTRACTS: 

contract  on  land  in  Michigan  owned  by  non-resident  taxable  in 

Michigan 78 

for  sale  of  land  in  Nebraska,  owner  of  land  non-resident 84 

CORPORATIONS.     (See  Stocks  and  Bonds — Section  Nine.) 

COUNTY  COURT: 

has  plenary  power  to  determine   all  questions  relating  to  tax- 
ation     185,   186,  230 

has  power  to  construe  a  will  for  the  purpose  of  fixing  tax.  .185,  186 

construction  of  will  conclusive  only  as  to  taxation 186 

when  State  not  bound  by  construction  of  will 186 

may  issue   commission  to   take   evidence 187,  231 

may  compel  witnesses  to  testify 187 

county  in  which  deceased  died  resident  has  jurisdiction 230 

county  in  which  property  is  located 230 

merits  of  cause  do  not  determine 230 

fundamental  power  of  court  determines 230 

COUNTY  JUDGE: 

has  sole  right  to  appoint  appraiser ? 178 

fixes  the  tax  178,  179 

appeal  from  County  Judge  *s  order 178 

who  may  appeal  from  County  Judge 's  order 178 

duty  is  to  appoint  appraiser 180 


448  INDEX. 

COUNTY  JUDGE — Continued:  Page. 

mandamus  will  lie  to  compel  appointment  of  appraiser 180 

County  Judge  may  appoint  on  his  own  motion .180,  181,  182 

duty  to  appoint  on  his  own  motion  if  facts  justify 180,  181,  182 

duty  to  appoint  appraiser  when  property  application  is  made..    183 

has  original  jurisdiction  to  fix  tax 184,  186 

is  assessing  and  taxing  official 184,  230,  231 

fixes  the  tax  * '  as  of  course  " 184 

fixes  the  tax  without  hearing  argument  on  appraiser's  report.  184,  185 

order  of  tax  must  be  entered  forthwith 185 

objection  to  order  of  tax  cannot  be  made  previous  to  entry 185 

objections   to   appraiser's   report   cannot   be   argued   before    the 

County  Judge  as  such 185 

has  power  to  determine  all  questions  relating  to  taxation. . .  .185,  186 
is  invested  with  plenary  powers  in  matters  of  assessment .  184,  185,  186 

may  appoint  appraiser  whenever  occasion  may  require 187 

may  compel  witnesses  to  testify 187 

not   precluded   from   taxing  property  previously   escaping   tax- 
ation    187,  188 

order  of  tax  is  final  if  not  appealed  from 188,  189,  190 

order  of  tax  cannot  be  modified,  except  on  appeal 189,  190 

cannot   review   excessive    valuation    on   petition,    appeal   neces- 
sary   189,  190 

order  of  tax  can  only  be  reviewed  on  appeal 191,  192 

order  of  tax  cannot  be  amended 192,  193 

order  of  tax  not  reversible  on  motion 193 

order  of  tax  is  a  decree  of  court 193,  194 

County  Judge  acts  judicially  in  entering  order  of  tax 194 

County  Judge's  notice  of  tax  presumed  to  have  been  served...   194 

must  enter  order  according  to  direction  of  court  of  review 195 

may  appoint  appraiser  before  claims  are  ascertained 200 

County   Judge   first   taking  jurisdiction 231 

real  estate  in  several  counties 231 

County  in  which  donee  of  power  resides 232 

when  decedent  dies  non-resident 232,  233 

COUNTY  TREASURER: 

is  only  ofl&cial  designated  to  receive  tax  (Sec.  6.  L.  1909). 
Treasurer  of  each  county  shall  collect  and  pay  taxes  to  State 

Treasurer 241 

County  Treasurer  receives  receipt  from  State  Treasurer 241 

reports  to  Auditor  of  Public  Accounts 241 


INDEX.  449 

COUNTY  TREASURER— Continued:  Page. 

liable  in  penalty  for  failure  to  pay  State  Treasurer 241 

must  remit  taxes  to  State  Treasurer  within  reasonable  time..  241 

remittance  to  State  Treasurer  can  be  enforced  by  mandamus.  . . .  241 
time  of  report  to  auditor  distinguished  from  time  of  remittances 

of  money 241,  242,  243 

has  no  interest  in  funds  collected  save  commissions 243 

COURT  OF  CLAIMS: 

decision  of  court  of  claims  on  refund  of  tax 418 

opinion  of  Griflath  v.  State  of  Illinois 418 

CREDITS.    (See  Property.) 

CUHTESY.     (See  Dower.) 

D 

DECREASE  IN  VALUE.     (See  Depreciation.) 

DEDUCTIONS: 

extravagant  sums  for  monument  and  burial  expenses  not  allowed 

under  Roman  law 2 

money  paid  to  compromise  will  contest  not  a  deduction 17,  18 

money  paid  to  prevent  litigation  not  deductible 17,  18 

dower  and  curtesy  valued  and  deducted  from  corpus  of  estate 

(N.  Y.)    37 

Ante-nuptial  contract  creates  debt  deductible 40 

mortgage  on  land  is  deduction 49 

payment  of  federal  tax  not  a  deduction  in  state  proceeding. ...  82 

payment  of  tax  in  one  state  not  a  deduction  in  another 82 

when  property  of  non-resident  equalled  by  indebtedness 83 

in  general 210 

a  debt  enforceable  against  estate  a  deduction 210 

must  be  proven  210 

costs  of  administration 210 

funeral  expenses  210 

executor  or  administrator  fees 210,  214 

attorney 's  fees 210 

attorney's  fees  defending  will 210,  211,  212 

clerk 's  costs  in  probate   210 

mortgages  and  liens 210 

interest  on  indebtedness   210 

amount  of  administration  fees  210 

agreed  fees  of  administration 211 


450  INDEX. 

DEDUCTIONS— Continued:  Page. 

when  no  fees 211 

claims  of  non-residents  211,  212 

claim  for  deduction  must  be  presented  at  appraisement 213,  221 

evidence  sufficient  to  support  claim 213 

commissions  of  administrator  may  be  estimated 213 

real  estate  taxes 214 

general  revenue  taxes 215 

when  not  deductible 215 

trustee 's  commissions 215 

mortgage  not  deductible  from  personalty 216 

inheritance  tax  not  deductible 216 

federal  tax  not  deductible 216 

cost  of  burial  lot 216 

claims  allowed  as  deductions  subsequently  defeated  cannot  in- 
crease estate  for  taxation  217 

doubtful  claim  not  deductible   217 

unliquidated  claim  not  deductible    217 

note  in  litigation 217 

legal  services  for  construction  of  will 217 

expense  of  litigation  between  beneficiaries 218 

ante-nuptial  contract  does  not  create  debt 218 

when  non-resident 's  property  is  appraised 218 

prorated  in  non-resident  estate 218 

when  chargeable  to  assets  at  domicile  of  non-resident 219 

apportionment  between  exempt  and  taxable  property 219 

when  co-tenant  furnishes  money  for  improvements 219 

expense  of  monument  cannot  be  deducted 375 

DEFINITIONS: 

transfer  defined    31 

the  word  *  *  costs' '  defined 238 

definition  of  *' charity"  and  ''benevolent'' 282 

DELINQUENT  TAX: 

County  Court  shall  issue  summons  to  show  cause 234 

State 's  Attorney  shall  prosecute  collection 234 

Inheritance  Tax  Attorney  shall  prosecute  collection 234 

proceeding  for  collection  same  as  in  Probate  Court 234 

Surrogate  may  force  payment 235,  236 

may  force  payment  by  committal  for  contempt 235,  236 

objection  to  assessment  cannot  be  raised  in  delinquent  proceed- 
ing   236 

liability  of  executor  not  determinable  under  Section  16  (N.  Y.)  236 


INDEX.  451 

DEPOSIT  TO  STOP  INTEREST  ON  TAX:  Page. 

deposit  can  not  be  made  with  the  County  Treasurer  to  save  dis- 
count   144,  366 

deposit  cannot  be  made  with  County  Treasurer  to  stop  inter- 
est    144,  366 

deposit  to  secure  consent  to  transfer  securities  and  property. 
(See  Section  Nine,  under  Practice  and  Procedure.) 

DEPOSITARY.    (See  Section  Nine.) 

DEPRECIATION  IN  VALUE  (See  Increase) : 

depreciation  in  value  after  death  does  not  affect  value  as  of  death  202 
misappropriation  by  executor  does  not  void  a  tax 203 

DISCOUNT:     (See  Deposit  to  Stop  Interest.) 

taxpayer  entitled  to  5  per  cent,  of  tax  assessed  if  payment  made 
within  six  months  of  death.    (See  Section  3,  Tax  Law.) 

DISTRIBUTION  FOR  TAXATION.    (See  Tax.) 

DOMICILE: 

Governs  the  succession  of  personal  property  wherever  located.  .16,  17 

governs  taxation  of  chattels  without  the  state 45 

personal  property  without  the  state  taxable 45 

DOUBLE  TAXATION.     (See  Tax.) 

DOWER: 

right  of  curtesy  does  not  pass  by  will  or  intestate  laws  and  is 

not  taxable  (N.  Y.)   18,  19 

must  be  valued  and  subtracted  from  corpus  of  property— remain- 
der only  taxable   (N.  Y.)    37 

not  taxable  under  New  York  law 37 

taxable  in  Illinois   38 

dower  passes  by  intestate  laws 38 

dower  is  a  succession  regulated  by  statute- 38 

E 

EDUCATIONAL.     (See  Exemptions.) 

EQUITABLE  CONVERSION: 

does  not  apply  to  inheritance  tax  cases 43 

real  estate  in  foreign  state  directed  to  be  converted  into  person- 
alty not  taxable  *. . .     43 

ERRONEOUS.    (See  Assessment — Refund  of  Tax.) 


452  INDEX. 

ERRONEOUS  PAYMENT.     (See  Refund  of  Tax.)  Page. 

EVIDENCE:     (Also  see  Burden  of  Proof.) 

proof  must  identify  property  alleged  to  have  been  transferred 

by  death 200 

when  deposit  in  name  of  husband  and  wife 201 

must  show  income  reserved  to  make  transfer  taxable 201 

EXCESSIVE  VALUATION.    (See  Valuation— Appeal.) 

EXECUTORS.     (See  Administrators.) 

EXEMPTION: 

One  claiming  must  point  to  the  law  sustaining  it 122,  123 

relates  to  share  of  beneficiary  and  not  to  total  estate  of  decedent  122 

an  exemption  will  not  be  presumed 123 

not  favored 123 

construction  against  claimant   123 

husband  of  daughter  who  died  before  testator 125 

when  husband  of  deceased  daughter  is  re-married  previous  to 

death  of  testator 126 

husband  of  a  daughter  who  died  before  testator 125,  126 

widow  of  adopted  son  is  widow  of  a  son 126 

child  of  person  to  whom  decedent  stood  in  relation  of  parent..   129 

limited  by  Illinois  Act  of  1909 130 

elements  necessary  to  constitute  relation  of  parent  and  child. . . .   130 

burden  of  proof  is  upon  person  claiming  exemption 130 

lineal  descendant  of  uncle,  aunt,  niece  or  nephew  exempt  $2,000.   133 
five  hundred  dollars  a  limitation,  not  an  exemption,  under  Sec- 
tion 1 134 

no  exemptions  or  exceptions  from  the  law  prior  to  1901 277,  278 

amendment  of  1901  not  retroactive  in  favor  of  charitable  insti- 
tutions     278 

Section  28  applies  to  only  domestic  corporations 279 

Foreign  education  corporation  taxable    278,  279 

definition  of  charity   282 

public   charity — what   constitutes    282 

religious  corporation  when  organized  under  law  of  foreign  state. .  283 

United  States  a  foreign  corporation  284 

Foreign  religious  corporation  holding  property  in  taxing  state . . .   284 

foreign  charity  with  branch  in  taxing  state 285 

foreign  charity  bequest  to  local  branch 286 

conitruction  favors  exemptions  of  charitable  bequest 286 

corporation,  educational  in  part 286 


INDEX.  453 

EXEMPTION— Continued:  Page. 

municipal  corporation  not  exempt    287 

bequest  for  saying  mass  (111.)  charitable  bequest 287 

foreign   corporation  property  without  taxing  state 289,  290 

Y.  M.  C.  A. — when  exempt 290 

when  beneficiary  of  first  class  receives  $100,000  or  less 125 

when  the  same  receives  over  $100,000 125 

when  beneficiary  of  second  class  receives  $20,000  or  less 132 

when  same  receives  over  $20,000 132 

when  beneficiary  of  third  class  receives  less  than  $500 133,  134 

when  beneficiary  of  third  class  receives  $500  and  over 133,  134 


FATHER.     (See  Exemption.) 

FEES  AND  COSTS:    (See  Clerk  of  County  Court— Sheriff— State's  Attor- 
ney.) 
People  not  chargeable  with 227,  228 

FOBMS: 

composition  agreement 391 

petition  for  appeal  from  County  Judge 's  order 395 

order  allowing  appeal  from  County  Judge  ^s  order 396 

bond  in  appeal  to  County  Court 396 

order  appointing  appraiser 397 

oath  of  appraiser 398 

appraiser 's  notice  of  hearing 399 

report  of  appraiser   399-403 

order  fixing  tax  of  County  Judge 403 

County  Judge 's  notice  of  tax 404 

County  Judge 's  certificate  of  mailing  notices 405 

administration  afl&davit,  Springfield  district    308 

no   administration   affidavit,    Springfield    district 310 

notice  for  transfer  of  securities  and  other  property 313 

Form  "SS" 313 

form  notice  for  consent  to  transfer  property 313 

Chicago  district  Form  '*A^'  administration  affidavit 316 

Chicago  district  Form  "N'^  no  administration  affidavit.  ..  .318,  319 

petition  for  no  tax 354,  355,  356,  357,  358,  359 

order  of  no  tax 361 


454  INDEX. 

G 

GENERAL  REVENUE  LAW:                                                                     Page, 
decisions  under  not  parallel  in  inheritance  tax  cases 19 

GIFTS  PRIOR  TO  DEATH.     (See  Transfer.) 

GRANDCHILD.     (See  Exemption.) 

GRANDMOTHER: 

is  not  lineal  descendant    131 

GUARDIAN: 

special  guardian,  when  unnecessary 276 

when  necessary 276 

H 
HISTORICAL: 

tax  established  in  Rome 2 

Roman  tax  referred  to  in  Gibbon 's  ' '  Roman  Empire ' ' 2 

Holland  3 

England 3 

British  Colonies   3 

United  States,  evolution  of  federal  inheritance  tax  law 3 

United  States,  no  federal  inheritance  tax  law 3 

Magoun  v.  Illinois  Trust,  etc.,  170  U.  S.  283,  reviews  history  of 

legislation 9,  10 

HUSBAND.     (See  Exemption.) 

HUSBAND  OF  DAUGHTER.     (See  Exemption.) 

I 

ILLINOIS: 

First  law  in  effect  July  1st,  1895 4 

amendment    of    1901 6 

Law  taken  from  New  York '. 4,  6 

held  constitutional  by  Illinois  Supreme  Court 6 

First  case  on  constitutionality  6 

amendment  of  1901  creates  additional  exemptions 13 

amendment  of  1901  added  Section  21%  to  test  taxability 13 

Act  of  1909  in  force  July  1st,  largely  taken  from  New  York. ...  14 

INCREASE: 

increase  in  value  of  property  after  death 202 

INHERITANCE.     (See  Succession.) 
INSTITUTION.     (See  Section  Nine.) 
INSURANCE.    (See  Life  Insurance.) 


INDEX.  455 

INTEREST:     (See  Deposit  to  Stop  Interest.)  Page, 

rate  is  6  per  cent  from  date  of  death  until  paid  unless  pay- 
ment within  six  months  of  death.     (Section  3,  Tax  Law.) 
5  per  cent,  rate  used  to  value  life  estate  and  annuity.     (Sec- 
tion 2,  Tax  Law.) 

runs   until  tax  is  paid 366,  367,  368,  374 

no  defense  to  collection  of  interest 374 

when  interest  on  tax  begins  to  run 141 

rate    of    interest    on    tax 141 

is  chargeable   from  date  of  death 142,  143 

County  Court  cannot  grant  release  from  payment  of 142,  143 

determined  by  law  in  force  at  death  of  testator 144 

on  estates  postponed  for  taxation 144 

deposit  to  save  interest  and  discount  not  allowable 144 

INTESTATE  LAWS: 

meaning  of    15 

INVENTORY: 

Attorney  General  has  right  to  compel  executor  or  adminis- 
trator to  file  inventory 197 

State  is  entitled  to  inspect  an  inventory 197,  198 

J 

JOINT  STOCK  ASSOCIATION: 

share  is  personal  property 45,  202 

JURISDICTION.     (See  Power  of  Appointment — County  Court — County 
Judge.) 

property  in  New  York  transferred  under  a  power  exercised  by 
non-resident  donee  to  non-resident  appointee   115,  116 

mortgages  held  outside  of  New  York  transferred  under  a  power 
by  a  non-resident   116,  117 

appraisement  of  real  estate  in  several  counties,  one  appraiser . .  231 

county  in  which  donee  of  power  resides  takes 232,  233 


LAWYER  FOR  APPRAISER.     (See  Appraiser  and  Appraisement.) 

LEASEHOLD  INTEREST.: 

is  personal  property   45 

LEGACY: 

to  non-resident  when  chose  in  action  not  taxable 79 


456  INDEX. 

LEGISLATIVE  POWERS.     (See  Constitutional  Powers.)  Page. 

LIABILITY.     (See  Tax — Administrators.) 

LIEN  OF  TAX:     (See  Practice  and  Procedure.) 

interested  party  may  file  petition  to  test  taxability 246 

may  be   lifted  by   County   Court   in   special    proceeding.      (See 

Practice  and  Procedure.) 

when  tax  is  postponed  247 

remains  until  tax  is  collected 247 

prior  lien  to  mortgage   248 

when  State  estopped  from  collection 248 

heir  or  beneficiary  not  relieved  from  liability 248 

lifted  from  real  estate   only 248 

bona  fide  sale  of  real  estate  lifts  lien 248 

executors,  administrators,  trustees  or  beneficiaries  not  relieved 

by  statute  of  limitations   250 

when  statute  is  bar  to  assessment  and  collection 251 

LIFE  ESTATE: 

does  not   diminish  value  of  property  previously  appraised  in  a 

subsequent  appraisement   120 

taxation  of  in  previous  appraisement  not  deductible  in  a  subse- 
quent appraisement  of  the  same  property 120 

when  exempt  from  tax 136 

method  of  valuation    138,  139 

to  be  valued  and  deducted  and  not  taxed 138,  139 

value  of  when  tenant  predeceases  appraisement 139 

5  per  cent,  rate  used  to  determine  value.     (Sec,  2,  Tax  Law.) 

LIFE  INSURANCE: 

insurance  payable  to  administrator,  executor,  etc.,  taxable 46 

not  taxable    at  home   of  corporation  when  policy   owned  by   a 
non-resident 83,   84 

LINEAL  DESCENDANT: 

means  direct  descendants  of  decedent 123 

child  of  adopted  child  is  lineal  descendant  of  decedent 126,  127 

when  not  lineal  descendant 127 

does  not  include  grandmother 131 

lineal  descendant  of  uncle,  aunt,  niece  or  nephew  exempt  $2,000  132 

M 
MARKET  VALUE: 

determined  as  of  date  of  death 138,  204 

excessive  valuation  not  reviewable  on  petition 189,  190 


INDEX.  457 

MARKET  VALUE — Continued:  Page. 

large  block  of  securities  thrown  on  market 204,  206 

sales  of  small  blocks  determine  value 204 

appraiser  may  consider  quotations  on  exchange 204 

private  sales  material 204 

appraiser  may  use  own  knowledge 204 

public  sales  material  207 

synonymous  with  true  value 207 

fixed  as  of  time  of  transfer 207 

when  no  market,  real  value  taken 208 

good  will  earning  capacity  and  assets  of  corporation 208 

isolated  record  sales  of  stock 208 

close  corporation  stock  208 

when  evidence  of  sales  is  not  contradicted 208,  209 

good  will 209 

range  of  market 209 

MISAPPROPRIATION  BY  EXECUTOR.     (See  Depreciation.) 
MONEY.     (See  Property.) 

MORTALITY  TABLES.     (See  Practice  and  Procedure.) 

valuation  of  life  estates,  annuities  and  remainders , .  342,  343,  344,  345 

MORTGAGE: 

mortgage  on  land  is  deduction  and  not  taxable 49 

MOTHER.    (See  Exemption.) 

MUTUALLY  ACKNOWLEDGED  RELATION.     (See  Acknowledged  Re- 
lation.) 

N 
NEPHEW.     (See  Exemption.) 

NEW  YORK: 

Laws  of  1885  and  1887  a  tax  on  collaterals 4 

amendment  of  1891   extended  tax  to  lineals 4,  5 

constitutionality  of  law  of  1885 4 

Act  of  1885  held  constitutional  by  U.  S.  court 5 

Act  of  1885  did  not  cover  non-residents'  property 5 

amendment  of  1887  covers  non-residents'  property 5 

Transfer  Tax  Act  of  1892  not  retroactive 19 

NIECE.     (See  Exemption.) 

NON-RESIDENT.      (See   Power   of   Appointment — Bonds   and   Notes — 
Stocks.) 
New  York  Act  of  1885  does  not  tax  non-resident's  property 5,  48 


458  INDEX. 

NON-EESEDENT— Continued:  Page, 

amendment  of  1887,  New  York,  covers  non-resident's  property.. 5,  48 

when  non-resident 's  property  taxable 48 

when  deceased  prior  to  receipt  of  legacy  property  not  taxable ....     79 

deceased  non-resident's  interest  in  resident  decedent's  estate 80 

a  beneficiary  in  unliquidated  assets 81 

a  credit  of  non-resident  within  taxing  state 81 

when  non-resident's  property  equalled  by  indebtedness 83 

owner  of  policy  in  New  York  not  taxable 83 

distribution  of  non-residents '  property  cannot  avoid  taxation . .  84,  85 

petition  for  no  tax   360 

recommendation  to  non-resident  representatives  of  non-resident 

estates  for  facilitating  business  with  Illinois  tax  authorities. 

(Practice   and  Procedure,   Sec.   9) 330 

NOTES.     (See  Bonds  and  Notes.) 

NOTICE:     (See  Appraiser  and  Appraisement.) 

County  Judge's  notice  of  tax  presumed  to  have  been  served 194 

O 

OBDEB  OF  TAX.     (See  County  Judge.) 

P 
PABTNEBSHIP  PBOPEBTY: 

when  not  taxable    79 

when  taxable    79 

with  the  terms  of  section  forbidding  corporation  or  depositary 

to    transfer    163 

when  assets  in  foreign  state  owned  by  resident  of  Illinois 390 

non-resident  partner— assets  in  Illinois 79 

PAYMENT  OF  TAX: 

payment  of  federal  tax  not  a  deduction  in  taxing  state 82 

payment  of  tax  in  one  state  not  a  deduction  in  other  taxing  state  82 
all  taxes  payable  by  executors,  administrators  and 

trustees    253,   254,    257,   258,   262,  263 

when  payment  at  highest  rate  diminishes  corpus 262 

payment  on  annuities  out  of  residuum 262 

payment  on  annuities  is  returnable  by  deducting  from  annuity. . .  262 

by  whom  and  from  what  property  payable 263 

when  payable  from  income 263 

when  paid  erroneously.    (See  Befund.) 

erroneous   payment    does   not   preclude   subsequent   taxation   of 

same  property   113,  114 


INDEX.  459 

Page. 
PAYMENT  TO  STOP  INTEEEST.    (See  Deposit  to  Stop  Interest.) 

cannot  be  made  previous  to  assessment 144,  145 

PETITION  FOR  APPEAL.     (See  Appeal.) 

PETITION  FOR  NO  TAX.     (See  Proceeding  to  Quiet  Taxability  Under 
Practice  and  Procedure.) 

POSTPONED  TAX.     (See  Tax) 

POWER  OF  APPOINTMENT: 

created  by  will  effective  prior  to  tax  legislation  and  exercised 

after  legislation 103,  109,  110,  112,  113 

created  by  will  effective  prior  to  legislation,  real  estate  con- 
verted into  personalty  before  transferred 103,  104,  105 

transfer  is  effected  by  exercise  of  the 

power 106,  107,  108,  110,  111,  112,  113,  114,  115 

property  not  taxable  until  power  exercised 106 

Legislature  has  power  to  create  taxable  transfer  by  exercise  of 

power 106,  107,  108 

when  situs  of  property  immaterial 110,  111 

when  erroneous  assessment  does  not  preclude  tax  on  transfer  by 

exercise  of   power    113,  114 

real  estate  in  New  York  appointed  by  non-resident  donee . .  114,  115 

donee  and  appointee  non-residents 115,  116 

mortgages  held  outside  of  New  York  transferred  under  a  power 

by  non-resident    116,  117 

when  not  exercised 117 

when  beneficiary  takes  under  will  and  not  under  power 117,  118 

when  exercise  of  power  is  mere  form,  beneficiary  takes  under 

will  creating  power 118,  119 

when  appointee  elects  to  take  by  will,  instead  of  power 119 

relationship  of  donee  and  appointee  determines  rate  of  tax 120 

rate  of  tax  governed  by  law  in  force  at  the  time  of  the  exer- 
cise of  the  power 120 

title  of  appraisement 202 

county  in  which  donee  of  power  resides  has  jurisdiction 232 

when  decedent  died  non-resident   232 

PRACTICE  AND  PROCEDURE:     (See  Delinctuent  Tax.) 

law  in  force  at  the  time  of  appraisement  determines  procedure.  124 

the  general  subject   297 

first  contact  with  inheritance  tax  law 297 


460  INDEX. 

PRACTICE  AND  PROCEDURE— Continued: 

Section  Nine.  Page. 

basis  for  issuing  consent,  in  general 301 

administration  of  Section  Nine  302 

two  districts  for  transacting  business 302 

Springfield  district  (all  counties  except  Cook) 303 

business  transacted  at  Springfield,  Illinois 302 

Springfield  jurisdiction    302,  303 

book  or  record  transfer  of  securities 302 

transfer  of  money,  Springfield  district 302 

transfer  of  other  property,  Springfield  district 302 

Chicago  district,  Cook  County  jurisdiction 303,  314 

banks,  trust  companies,  safe  deposit  companies,  institutions  hav- 
ing principal  office  in  Cook  County 303 

corporations    and   associations    having  principal   office   in    Cook 

County 303 

depositary  in  Cook  County  303 

book  or  record  of  transfer  of  securities 303 

inheritance  tax  attorney 303 

collateral 303 

corporations  or  associations  having  transfer  books  outside  of  the 

State  of  Illinois 305 

railroads  and  other  corporations  doing  interstate  business 304 

communication  to  wrong  district  304 

consent  only  lifts  liability  for  tax  and  penalty 304 

notice  must  be  given  by  corporation  or  depositary 304 

how  to   obtain  consent — Springfield  district    305 

effect   of   administration    306 

examination  of  boxes  or  property — Springfield  district 306 

emergency  cases — Springfield  district 306 

transfer  of  securities — Springfield  district   306 

how  to  describe  securities  for  consent 306 

transfer  of  securities,  deceased  a  non-resident — Springfield  dis- 
trict   307 

administration  affidavit  required — Springfield  district 308 

no  administration  affidavit  required  in  Springfield  district 310 

form  notices  for  transfer  of  securities — Chicago  and  Springfield 

districts 313^ 

form  "SS"  notice  (transfer  of  property  in  general) 31$ 

all  business  transacted  at  Chicago 314 

bank  deposits,  resident  of  Illinois 314,  315 

bank   deposits,   non-resident 314 


INDEX.  461 

PRACTICE  AND  PROCEDURE  (Continued) : 

Section  Nine — Continued:  Page. 

money  other  than  bank  deposits 314 

transfer  of  money  or  property — what  constitutes 315 

bank  deposit,  no  administration  pending 317 

immediate  transfer  before  consent 315,  317,  318 

bank  deposit,  non-resident 321 

money  securities,   deposits  or  other  assets   excepting  bank  de- 
posits      321 

effect  of  administration  in  Illinois  on  resident  decedent 322 

effect  of  no  administration,  resident  decedent 322 

security  demanded  for  issuing  consents 322 

reports  of  examiners  of  property  with  depositary 322 

when  decedent  is  non-resident  of  Illinois 323,  324,  325 

deposit  to  secure  consent  325 

deposit  returned  325 

delay  in  issuing  consents  325 

book  transfers  of  stock  and  registered  bonds,  resident  or  non- 
resident  .325,  326 

registered  bonds,  id 

affidavit  required  in  non-resident  estates 326 

safe  deposit  company 327 

storage  company  327 

depositary 327 

when  consent  issues   327,  328 

emergency  examination  of  property 328,  329 

deposit  system    329 

non-residents — recommendation   to    330 

non-resident    questions    to    be     answered    in    non-resident    es- 
tates     322,    330,  331 

affidavit  required  in  non-resident  estates 331 

mistakes  in  preparing  affidavit 331 

delay  in  receiving  consents   332 

Section  Eleven. 

appraisement    and   appraiser 332,  335 

in  general 332 

duty  of  attorney  representing  estate 332 

investigation   of   estates    332 

appraisement   332 

evidence  at  tax  hearing  332 

special  guardian 332 


462  INDEX. 

PRACTICE  AND  PROCEDURE  (Continued). 

Section  Eleven — Continued:  Page. 

appraiser 's  report 332 

hearing  rooms  for  appraisements 335 

hearing  before  appraiser,  non-resident  cases 336 

hearing  before  appraiser,  resident  cases 336 

facts  uniformly  necessary  for  record 336,  337 

valuation  of  close  corporation  stock 338 

appraiser's  record  in  appraisement 338 

evidence  taken  by  court  reporter 338 

court  reporters  employed  by  inhertance  tax  office 339 

cash  value 339 

when  objections  to  appraiser's  report  can  be  argued 339 

good  practice  in  preparing  inventories  for  appraisement 339 

description  of  property  in  inventory 340 

certificate    number   of   shares    of    stock    and    serial   number    of 

bonds  required  in  inventory 340 

appraiser  involuntary  appointment   341 

how  value  of  life  estates  determined 341 

how  value  of  remainders  determined 341,  342 

mortality  tables  342,  343 

how  to  ascertain  value  of  annuity  or  estate  for  life 343 

how  to  ascertain  present  value  of  remainder 343 

annuity,  value  of  for  fixed  period 344 

table  for  valuing  annuity 344,  345 

Appeals. 

appeal  to   County  Court 345 

trial  in  County  Court  de  novo 346 

appraiser's  report  as  evidence  in  appeal  cases 346,  347 

appeals  to  Supreme  Court 347 

Proceeding  to  Quiet  Question  of  Taxability. 

(Petition  for  No  Tax.) 

any  interested  party  may  proceed  in  the  County  Court  to  the 

end  of  clearing  question  of  taxability 248,  349 

at  least  two  methods  offered  for  clearing  taxability 349,  350 

procedure  for  determining  taxability  under  Section  11 351 

meaning  of  ' '  property  in  this  state " 351 

meaning  of  "property  within  the  meaning  of  this  act" 351 

interested  party 352 


INDEX.  453 

PEACTICE  AND  PROCEDUEE— Continued :  Page. 

proof  required  in  no  tax  proceeding — general 353 

description  of  property  in  inventory  attached  to  petition 353 

form  petition  for  no  tax 354,  355,  356,  357,  358,  359 

non-resident  decedent — petition  for  no  tax 360 

relation  of  parent  to  beneficiary 361 

form  order  of  no  tax 361 

suggestions  to  lawyers  363 

entry  of  no  tax  order 364 

O.  K.  'd  order  of  no  tax 364 

PRESUMPTION: 

it  is  presumed  that  the  transfer  of  property  is  within  the  state . .  200 

PROBATE  COURT: 

Probate  Court  cannot  discharge  liability  of  legal  representa- 
tive    , 153,  154 

approval  of  final  account  and  report  without  payment  of  tax 
does  not  relieve  executor  or  administrator  from  liability 154 

may  demand  voucher  showing  payment  of  tax 154 

PROCEDURE.     (See  Practice  and  Procedure.) 
PROCESS: 

service  on  interested  parties  is  had  by  mailing  notice 196 

expense  for  service  of  summons 238 

Sheriff  cannot  be  reimbursed  by  State  Treasurer 238 

Attorney  GeneraPs  opinion  on  reimbursing  Sheriff 238,  239 

the  word  * '  costs ' '  defined 238 

PROPERTY: 

real  converted  into  personalty  by  testamentary  direction 44 

when  real  estate   converted  by  direction  is  personalty 44 

all  property,  real  and  personal,  at  domicile,  taxable 44 

leasehold  interest  in  land  is  personal  property 45 

chattels  without  taxing  state  taxable 45 

personal  property  without  the  state  taxable 45 

share  in  joint  stock  association  owning  real  estate  is  personalty  45 

insurance  is  property  of  decedent 46 

when  non-resident 's  property  ' '  within  taxing  state  " 48 

money  of  non-resident  deposited  two  months  in  taxing  state 75 

money  of  non-resident  in  taxing  state  taxable 75,  76 

capital  of  non-resident  invested  in  New  York  taxable 78 

share    of  resident   in  undistributed  foreign   assets   not   taxable 

property 80 


464  INDEX. 

PROPERTY — Continued:  Page. 

a  credit  of  non-resident  within  taxing  state 81 

when  property  in  several  counties 231 

PUBLIC  ADMINISTRATOR: 

has  no  general  duty  to  enforce  tax  law 383 

must  pay  tax  on  succession  to  property  in  his  hands 383 

B 
BATES  OF  TAX: 

in  general  27,  28,  29,  30,  31,  32, 123  to  134  inclusive 

is  determined  by  relationship  between  donee  and  appointee  of 

power 120 

governed  by  law  in  force  at  time  of  the  exercise  of  the  power.  .   120 

determined  by  relationship  of  decedent  to  beneficiary 122 

determined  by  law  in  force  at  the  date  of  death  of  decedent 124 

one  per  cent,  class 123,  124 

two  per  cent,  class 123,  124 

three  to  ten  per  cent,  class 123,  124 

rate  when  beneficiary  of  first  class  takes  over  $100,000.  .123,  124,  125 

rate  when  beneficiary  of  second  class  takes  over  $20,000,123,  124,  125 

when  highest  rate  assessable 258,  259,  260 

REAL  ESTATE: 

is  taxable  in  state  where  situate 50 

in  several  counties — where  taxable 231 

situate  without  Illinois  not  taxable 43 

RE-APPRAISEMENT.    (See  Appraisement.) 

RECEIPT  FOR  TAXES: 

any  person  or  corporation  entitled  to  receipt 244 

duplicate  issued  on  payment  of  fifty  cents  to  County  Treasurer.   244 

receipt  to  be  sealed  by  State  Treasurer 244 

receipt  must  designate  real  estate 244 

receipt  may  be  recorded  with  clerk 244 

filing  of  receipt  in  several  counties 244,  245 

RECORD: 

must  disclose  all  material  facts  desired  to  be  presented  to  court 
of  review   200 

REFUND  OF  TAX: 

County  Treasurer  cannot  refund 170,  171 

State  Treasurer  cannot  refund  without  appropriation 171 


INDEX.  455 

REFUND  OF  TAX— Continued:  Page. 

payment  must  have  been  made  under  duress  or  compulsion 171 

court  of  claims  awards  refund  for  erroneous  payment.  .171,  172,  418 
State  Auditor  cannot  draw  warrant  for  erroneous  payment ....  172 
interest  cannot  be  recovered  on  refund  unless  provided  by  statute  172 

interest  cannot  be  recovered  on  refund  in  Iowa 172,  173 

duty  of  the  state  in  matter  of  refunds 173 

REFUND  OF  TAX: 

on  erroneous  payment  of  tax 387 

authority  of  auditor  to  draw  warrant  for  refund 387 

appropriation  necessary  for  refund 388,  389 

opinion  of  court  of  claims  allowing  refund 418 

RELATIONSHIP: 

in  transfer  by  power,  relationship  of  donee  and  appointee  de- 
termines  rate    120 

grandmother  is  not  lineal  descendant 131 

RELATION  OF  PARENT  AND  CHILD.    (See  Acknowledged  Relation.) 
RELIGIOUS.    (See  Exemption.) 

REMAINDERS: 

created  prior  to  tax  law  not  taxable 20,  21 

vested  as  of  date  of  death  of  decedent 32 

title  to  be  fixed  at  time  of  death  of  decedent 32 

contingent  remainder  not  presently  taxable 35 

when  vested  under  law  of  1895 35 

when  taxable 35 

defeasible  estates  not  taxable  until  indefeasible 35 

created  prior  to  tax  legislation  not  taxable 36 

method  of  determining 138,  139 

when  vested 254,  255 

when   contingent    255 

when  vested  under  prior  enactment  not  affected  by  subsequent 

law  taxing  at  full  value 266,  267 

value  of  life   estate  in  previous  assessment  does  not  diminish 

property  for  valuation  in  subsequent  appraisement 268 

effect  of  prior  valuation  of  postponed  property  on  second  ap- 
praisement   271,  272 

REPEAL: 

amendatory  act  does  not  relieve  vested  interests 292 

when  repeal  amounts  to  revision 292,  293 

new  enactment  embodying  same  principles  of  law  repealed.  .293,  294 


4:66 


INDEX. 


EESIDENCE:  Page. 

appraiser  has  power  to  determine 199 

RETROACTIVE: 

transfer  tax  act  of  New  York  of  1893  not  retroactive 19 

amendment  of  1901   (111.) 278 

REVISION.    (See  Repeal.) 

S 

SAFE  DEPOSIT  COlNIPANy.    (See  Section  Nine.) 

SECTION  NINE  (Also  See  Practice  and  Procedure) : 

is  constitutional   159 

litigation  in  Illinois  involving 159 

deposit  box  in  possession  of  safe  deposit  company 160 

corporation  organized  as  safe  deposit  company 160 

deposit  company  holding  property  of  decedent  is  bailee 160 

depositary  must  deliver   contents  to  owner 160 

state  is  part  owner  of  contents  of  box 160,  161 

state  is  part  owner  of  securities,  deposits  or  assets  held  by  de- 
positary     160 

state's  interest  in  deposit  of  property  is  effective  at  the  time  of 

decedent 's  death    161 

state  must  receive  notice 161 

state  must  be  advised  of  contents  of  box  or  deposit 161 

depositary  not  deprived  of  constitutional  right  by  requirement 

of  notice  163 

depositary  has  remedy 163 

state  has  interest  equal  to  beneficiary 163 

interested  parties  are  entitled  to  knowledge  of  contents  of  box  163 

joint   lessees    163* 

co-partnership  property    163 

act  covering  joint  lessees  constitutional 163 

act  covering  partnership  property  constitutional 163 

section  does  not  impair  obligation  of  charter  of  depositary...    163 
section  does  not  impair  obligation  of  contract  with  lessees.  164,  165 

depositary  must  not  deliver  until  tax  is  paid 165 

depositary  not  deprived  of  property  without  due  process 165 

depositary  as  tax  gatherer 165,  166 

unreasonable    searches    and    seizures 167 

property    of    safe    deposit    company   not    subject    to    public    use 

without    compensation 167 

corporation  liable  for  transfer  of  stock 168 


INDEX.  457 

SECTION  NINE— Continued:  Page. 

notice  must  be  given  by  the  depositary 168 

notice  must  be  given  by  tlie  custodian  of  money  or  securities.   168 
notice  must  be  given  by  corporation,  bank,  trust  company,  insti- 
tution, association  or  person 168 

penalty  for  non-compliance  with  the  law 298 

failure    to    serve    notice 298 

failure   to    allow   examination 298 

failure   to   retam   tax 298 

failure   to   secure   consent  to   transfer 298 

liability    of    depositary 299 

liability  of   corporation 299 

liability    of    association 299 

estimation    of   tax 300 

retention  of  property  to  cover  tax 300 

last  will  and  codicils  not  property  within  the  meaning  of  Sec- 
tion   Nine     168,  169 

meaning  of  transfer  of  property  within  the  section 169 

Attorney  General  and  State   Treasurer  have  right  to   examine 
property  in  possession  or  control  of  depositary 163  to  169 

CONSENT  TO  TRANSFER  PROPERTY.    (See  Practice  and  Procedure.) 

SECTION  TWENTY-FIVE  (Also  See  Contingent  Transfers) : 

origin    of    256 

is    constitutional    258,  259,  260,  261 

contingent    transfer   taxable 258  to  261 

SECURITY  FOR  TAX: 

Section  Two  provides  bond  may  be  given  by  beneficiary  not  in 
actual    enjoyment    140 

SERVICE.    (See  Process.) 

SHERIFF.    (See  Process.) 

SISTER.    (See  Exemption.) 

SITUS  (See  Stocks,  Bonds  and  Notes) : 

of  property  transferred  by  power,  when  immaterial 110,  111 

SPECIAL  GUARDIAN.    (See  Guardian.) 

STATE:  i]  ;;;;^;2;^ 

is  interested  as  beneficiary  in  all  transfers  by  death,  etc 14 

state's  interest  accrues  at  death  of  decedent 14,  37 

state's  interest  is  a  vested  interest,  equal  to  beneficiary's....     14 
when  not  bound  by  construction  of  will 186 


468  INDEX. 

STATE'S  ATTORNEY:                                                                                 Page, 
fees    in    general 366 

STATE  TREASURER.    (See  County  Treasurer;  Refund  of  Tax.) 

STATUTE  OF  LIMITATIONS.    (See  Lien  of  Tax.) 

STEP-CHILD.    (See  Acknowledged  Relation— and  Transfer.) 

STOCK  ASSOCIATION.    (See  Joint  Stock  Association— and  Section 
Nine.) 

STOCKS: 

share  in  joint  stock  association  is  personal  property 45 

of  domestic  corporation  certificates  in  Illinois  taxable,  decedent 

non-resident 51 

of   foreign   corporation   certificates   in   Illinois    owned   hy   non- 
resident   not    taxable 51 

of    domestic   corporation   taxable 53 

certificates  and  owner's  residence  without  state 54,  55,  57 

non-resident  ownership  does  not  relieve  from  tax 54 

share  of  stock  represents  property  at  home  of  corporation .  53,  54,  55 

situs  for  taxation 55 

owner's  residence  and  certificates  without  New  Jersey  not  tax- 
able therein    55,  56 

owner's  residence,  certificates  and  sole  administration  without 

taxing   state    57 

when  corporation  has  property  in  two  states  taxable  at  full  value     58 
wben  corporation  is  organized  in  one  state,  property  in   several 

states 59 

corporation  organized  in  two  states,  taxable  on  proportion 59 

proportion  of  property  in  two  states  determined  on  mileage 63 

proportion  is  determinable  by  percentage  of  property 63,  64 

place  of  deposit  of  certificates  of  foreign  corporation  does  not 

determine   taxability    65,  66 

organized  in  two  states,  proportion  taxable 64,  63 

domestic  corporation  requires  administration  at  home  of  corpora- 
tion        64 

of  national  banks  taxable 64,  65 

foreign  situs  of  certificate  does  not  determine  taxability 65,  66 

of  foreign  corporation  taxable  at  domicile  of  owner 65,  66 

national  bank  taxable  in  state  of  location  of  bank 66 

of  foreign  corporation  not  taxable 68 

certificates  without  the  state  taxable  in  state  of  incorporation . .     71 

STORAGE  WAREHOUSE.    (See  Section  Nine.) 


INDEX.  469 


SUCCESSION  (See  Stocks,  Bonds  and  Notes — Domicile — Power  of 
Appointment) : 

tax  is  on  succession  and  not  on  property 4,  6,  7,  10,  21 

governed  by  the  law  of  the  state 6 

laws  of  descent  and  right  to  devise  owe  their  existence  to  statute 

law 6 

right  to  inherit  and  devise  dependent  on  legislation 6,  10,  14 

state  can  tax  right  to  inherit 6,  7 

may  impose  conditions  on  right  of  succession 7 

governed  by  law  of  domicile  of  decedent 16,  17 

tangible  property  of  resident  in  foreign  state 16,  17 

cannot  be  changed  by  compromise 17 

succession  accrues  at  death  of  testator 37 

dower  is  a  succession  taxable  in  Illinois 38 

chattels  and  other  personalty  without  the  state  taxable  at  dom- 
icile       45 

SUGGESTIONS  TO  LAWYERS:  ^ 

in  no  tax  proceeding 363 

SUMMONS.    (See  Process.) 

SUPREME  COURT: 

when  state 's  Supreme  Court  final  on  matters  of  taxation 22 

of  United  States,  when  construction  of  state  court  followed 222 

T 

TABLES  OF  VALUATION.    (See  Mortality  Tables.) 

TAX  (See  Contingent  Transfers) : 

is  on  succession  and  not  on  property 6,  7,  9,  10 

classification  for  taxation  when  reasonable 12,  13 

three  classifications  in  Illinois  act 13 

governed  by  statute  in  force  at  death 15 

distinction  between  inheritance  tax  and  general  revenue  law. .     19 

when  postponed 34,  35,  380 

contingent  interest  necessitates  postponement  of  tax 34,  35 

contingent  remainder  not  presently  taxable 35 

tax  payable  at  decedent 's  death 35 

cannot  be  assessed  on  remainder  created  prior  to  tax  legislation     36 

defeasible  estates  postponed  for  taxation 35 

right  of  state  to  tax  accrues  at  death  of  decedent 37 

corporation  organized  in  two  states,  apportionment  for  taxation     63 


470  INDEX. 

TAX — Continued:  Page, 

may  be   collected  from  successions  to   same  property  in  two 

states  .  74,  75 

double  taxation  (so-called)  constitutional 74,  75 

when  property  pro  rated 85,  86 

executors  cannot  reduce  tax  by  arbitrary  distribution 85,  86 

taxation  of  life  estates  does  not  diminish  tax  on  same  property 

in  subsequent   appraisement 120 

accrues  at  death  of  decedent 121,  380 

is  on  beneficial  interest 121 

does  not  accrue  on  rights  effective  prior  to  tax  legislation 122 

when  tax  accrues 141 

when  due  and  owing 141 

paid  by  whom 142 

tax  proceeding  is  one  at  law 177 

when  due  and  legally  demandable 247 

a  prior  lien  to  mortgage 248 

heir  or  beneficiary  not  relieved  from  liability 248 

all  taxes  presently  payable  253,  254,  255,  256,  257,  258,  259,  260,  261 

payable  by  executor 253,  254 

is  assessed  as  of  date  of  death  of  decedent 278 

TAX  PROCEEDING.    (See  Practice  and  Procedure.) 

TAXATION.    (See  Tax.) 

TITLE  OF  APPRAISEMENT  CASE.    (See  Appraiser  and  Appraise- 
ment— ^Power  of  Appointment.) 

TRANSFER   (Also  See  Contingent  Transfers  and  Constitutional  Power 
of  Appointment  and  Partnership): 

transfer  by  will  prior  to  tax  legislation  not  taxable 20,  21 

defined 31 

date  of  determines  rights  of  beneficiaries 31 

date  of  is  determined  by  death  of  decedent 31 

right  of  determined  by  date  of  transfer .' 31 

time  of  fixed  by  death  of  decedent  effecting  transfer 32 

title  to  remainder  effected  at  date  of  death 32 

uncertainty  of  beneficiary  does  not  affect  time  of 33 

acceptance  is  necessary 32 

motive  of  transfer  immaterial 32 

when  object  is  to  pay  a  debt 32,  33 

when  widow  accepts  devise  in  lieu  of  dower  under  will 32,  33 


INDEX.  471 

TRANSFER— Continued:  Page. 

trustees '  fees  joined  with  annuity 33 

must  be  something  of  value 34 

worthless  account 34 

gift  inter  vivos  when  not  perfected 42 

when  in  contemplation  of  death 86,  87,  88,  89,  90 

when  not  in  contemplation  of  death 91,  92 

to  take  effect  after  death 92,  93,  94 

a  writing  not  necessary  to  evidence  retention  of  income 92 

oral  arrangement  retaining  income  on  transfer  prior  to  death. 92,  93 

prior  to  death,  when  not  taxable 94,  95 

prior  to  death,  when  taxable f 96 

to  take  effect  at  or  after  death 96,  97,  98,  99 

retention  of  income  on  transfers  prior  to  death 96,  97,  98,  99,  100 

reservation  of  income  transferred  by  oral  arrangement 100 

prior  to  death,  when  not  taxable 100 

transfer  intended  to  defeat  tax  does  not  void  transfer 101 

taxable  as  of  the  date  of  death  of  donor  or  grantor 101 

prior  to  inheritance  tax  legislation,  when  taxable 101 

miscellaneous  cases  of  transfers  prior  to  death 101,  102 

act  taxing  gift  in  contemplation  of  death  constitutional 90,  91 

to  child  of  adopted  child 123 

to  widow  of  adopted  son 126 

to  child  adopted  under  law  of  foreign  state 126 

to  children  of  adopted  child 126,  127 

to  step-child 

widow 's  award 38,  39 

to  step-child 130,  131 

ante-nuptial  contract  to  make  will 40 

dower.    (See  Dower.) 

of  stocks.   (See  Stocks.) 

of  bonds  and  notes.    (See  Bonds  and  Notes.) 

of  credits.    (See  Property.) 

of  land  contracts.    (See  Contracts.) 

to  husband  of  daughter  who  died  before  testator 125 

to  husband  of  deceased  daughter  who  remarried  previous  to  death 

of  testator 126 

to  United  States 284 

to  charitable,  religious,  educational  or  benevolent  use 

278,  284,  285,  289 

to  corporation  educational  in  part 287 

for  saying  masses 287 


472  INDEX. 

TRANSFER— Continued:  Page. 

to  Y.  M.  C.  A 

of  foreign  real  estate 43 

to  grandmother    131 

property  in  N.  Y.  transferred  under  power  of  non-resident  donee 

to  non-resident  appointee   115,  116 

mortgages  held   outside  of  N.  Y.   transferred  under  power   by 

non-resident    116,  117 

when  non-resident  beneficiary  dies  before  N.  Y.  assets  are  dis- 
tributed    79 

of  non-resident's  interest  in  resident  decedent's  estate 80 

of  credit  in  N.  Y.  owned  by  non-resident 81 

of    chattels    without    domiciliary    state 45 

of   insurance    46 

TREASURER.    (See  County  Treasurer.) 

TRIAL.    (See  Appeal — Practice  and  Procedure.) 

TRUST  COMPANY.    (See  Section  Nine.) 

TRUSTEES: 

fees  of,  when  coupled  with  annuity 33 

personally  liable  for  the  inheritance  tax 149 

U 

UNCLE.    (See  Exemption.) 

UNITED  STATES: 

foreign    corporation    and   taxable 284 

when   taking  as  beneficiary 284 

V 

VALUATION  (See  Market  Value) : 

cannot  be  reviewed  on  motion  or  petition 189,  190,  221 

VALUE.    (See  Market  Value — Depreciation  in  Value — Increase.) 

W 

WAREHOUSE.    (See  Section  Nine.) 

WIDOW.    (See  Exemption.) 

WIDOW  OF  ADOPTED  SON.    (See  Exemption.) 

WIFE  OF  SON.   (See  Exemption.) 

WIDOW  OF  SON.    (See  Exemption.) 


INDEX.  473 

WILLS  (See  Section  Nine):  Page. 

does  not  need  consent  to  transfer  under  Section  Nine 384 

may  be  removed  without  permission   of  Attorney  General  and 
State   Treasurer    384 

WITNESS.    (See  County  Judge  and  County  Court.) 

WORTHLESS  ACCOUNT: 

not   taxable   34 

when   insolvent   beneficiary   not   taxable    on   worthless   account 
owing    to    decedent 34 


INDEX  TO  SECTIONS  OF  INHERITANCE 
TAX  LAW. 


Sections  of  Law  of  1895  Amd.  1901. 

Section.  Page. 

1  Succession — Transfer — Exemptions — Bates 405 

2  Life  Estates  Exempt — Eemainders — ^Bond   406 

2%  Exemptions  to  Eeligious — Educational — Charitable  Uses....  408 

3  Accrual — Discount — Interest 408,  409 

4  Administrators — Executors — Trustees  .  409 

5  Executors — Administrators  and  Trustees  have  Power  to  sell 

property 410 

6  Tax  Payment  and  Eeceipt 410 

7  Information  to  County  Treasurer 410 

8  Eefund 411 

9  Transfer  of  Property  by  Foreign  Executor  or  Administrator  411 

10  Eefund 411 

11  Appraiser — Appraisement — County  Judge — Appeal 411,  412 

11%     Fees  of  Clerk — Inheritance  Tax  Clerk 413 

12  Misconduct  of  Appraiser 414 

13  Jurisdiction 415 

14  Delinquent  Tax 415 

15  Delinquent  Tax  415 

16  Information  Concerning  Property  Taxable 416 

17  Summons 416 

18  Eecords 416 

19  Eemittance  of  Taxes  to  State  Treasurer 416 

20  Commissions  of  County  Treasurer 416 

21  Duplicate  Tax  Eeceipt  and  Filing 417 

21%     Settling  Question  of  Lien 417 

22  Lien  of  Tax — ^Limitation 418 

23  What  Eepealed   418 

Sections  of  Law  of  1909. 

1  Transfers — ^Power  of  Appointment — Exemptions — ^Eates 27 

2  Valuation  of  Life  Estate — Eemainder — Eate — ^Lien 135 

3  Accrual — Discount — Interest 141 

[475] 


476  INDEX  TO  SECTIONS. 

Section.  Page. 

4  Administrators— Executors  Trustees  to  Collect  and  Pay  Tax  146 

5  Liability  for  Tax 148 

6  Payment  of  Tax — Eeceipt 153 

7  Information  to  County  Treasurer 155 

8  Eefund 156 

9  Transfer  of  Property  by  Safe  Deposit  Co.,  Trust  Co.,  Cor- 

poration— ^Bank,  etc.,  Notice  to  State  Officers — Reten- 
tion of  Tax — Consent   157 

10  Erroneous  Payment  170 

11  Appraiser  —  Appraisement  —  Valuation — County  Judge — Ap- 

peal    176 

12  Fees  of  Clerk — Inheritance  Tax  Clerk 225 

13  Misconduct  of  Appraiser 229 

14  Jurisdiction 230 

15  Delinquent  Tax  Collection 234 

16  Delinquent   Tax   Collection 234 

17  Information  to  County  Treasurer 237 

18  Summons  and  Disbursements 238 

19  Records 240 

20  Remittance  of  Tax  to  State  Treasurer 241 

21  Commissions   of  County  Treasurer 244 

22  Duplicate  Tax  Receipt — ^Filing  in  Counties  where  Real  Es- 

tate is  situate 244 

23  Settling  of  Question  of  Lien 246 

24  Lien — Statute  of  Limitation 247 

25  Transfers  Presently  Taxable — Tax  Presently  Payable 253 

26  Compromise  of  Tax 274 

27  Special  Guardian 276 

28  Exemption  of  Religious  —  Educational  —  Charitable,  etc., 

Transfers 277 

29  Transfer 291 

30  Certified  Copies  of  Papers 291 

31  What  Repealed  292 


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